What Is the Theory of Constraints

question 20

Multiple Choice

What is the theory of constraints?

• A)TOC recognizes that EOQ is important.
• B)TOC recognizes that lowering inventory decreases carrying costs and thus decreases operating expenses and improves net income.
• C)TOC recognizes that lower inventories mean more defects.
• D)TOC recognizes that lower inventories mean slower response to customers.

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Definitions:

Apartments

Individual dwelling units within a larger residential building where each unit is owned or rented by separate individuals or families.

Risk Aversion

The tendency to prefer avoiding losses over acquiring equivalent gains; the degree of variability in investment returns that an investor is willing to withstand.

Possible Losses

Potential or anticipated losses, which could be in terms of finances, opportunities, well-being, or other valuable aspects.

Possible Gains

The potential benefits or positive outcomes that might be achieved from a particular action or decision.