Under the Theory of Constraints,throughput Is Defined as the Difference

question 13

True/False

Under the theory of constraints,throughput is defined as the difference between the sales and the operating expenses of a plant.

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Definitions:

Average Output

The total output produced divided by the number of units of input, measuring the efficiency or productivity of production.

Diminishing Marginal Returns

The principle that as an additional unit of a factor of production is added to a fixed amount of other factors, the increase in output will eventually decrease.

Variable Inputs

Refers to inputs used in production that can be adjusted in the short term to meet changes in output levels, such as labor or raw materials.

Returns To Scale

A concept in economics that describes how a proportionate increase in all inputs affects the level of output.