How Can Managers Overcome Constraints? Give an Example of How

question 127

Essay

How can managers overcome constraints? Give an example of how a manager in a manufacturing setting can overcome typical constraints.

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Definitions:

Profitability Indexes

A calculation used to assess the attractiveness of an investment by dividing the present value of cash flows by the initial investment.

Accounting Rate of Return

A financial metric used to assess the profitability of an investment, calculated by dividing the average return from an investment by the initial cost.

Profitability Index

A financial tool used to determine the desirability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.

Internal Rate of Return

A financial metric that estimates the profitability of potential investments by calculating the discount rate that makes the net present value of all cash flows from a project equal to zero.