Which of the Following Is NOT an Effective Way of Dealing

question 25

Multiple Choice

Which of the following is NOT an effective way of dealing with a production constraint (i.e.,bottleneck) ?

• A) Reduce the number of defective units produced at the bottleneck.
• B) Pay overtime to workers assigned to the bottleneck.
• C) Pay overtime to workers assigned to workstations located after the bottleneck in the production process.
• D) Subcontract work that would otherwise require use of the bottleneck.

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Definitions:

Price Ceiling

A legally established maximum price that can be charged for a good or service, preventing prices from reaching equilibrium levels.

Surplus

A situation where the quantity of a product supplied exceeds the quantity demanded, often resulting in a decrease in prices.

Shortage

A shortage occurs when the demand for a product exceeds the supply of that product at a specific price.

Price Floor

A government-imposed minimum price charged for a commodity, aimed at preventing prices from falling too low.