A Practical Example of When the Theory of Constraints Would

question 7

Multiple Choice

A practical example of when the theory of constraints would not be an appropriate management technique to use would be:

• A) Long lines at checkout stands.
• B) Busy signals on Internet server sites.
• C) One critical production process provides 60 parts/min. output, compared with a company-wide output of 90 parts/min.
• D) Balanced, fast movement of the product through the plant.

---

Definitions:

Efficient Price

A market price that fully reflects all available information and maximizes the total benefits to society.

External Benefits

Positive effects experienced by third parties or the public due to an economic transaction they were not directly involved in.

Market Outcomes

The results of interactions between buyers and sellers in a market, including price, quantity, and quality of goods and services traded.

Efficient Quantity

The level of production that maximizes the difference between total revenue and total cost, leading to optimal resource allocation.