A Bottleneck

question 27

Multiple Choice

A bottleneck:

• A) Is not a capacity constraint
• B) Has an opportunity cost of lost revenue from unmet demand
• C) Is unrelated to capacity
• D) Cannot be used efficiently

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Definitions:

Adjusted Cost of Goods Sold

The cost of goods sold figure after adjustments for factors like overhead, discounts, returns, and allowances have been taken into account.

Manufacturing Overhead

All indirect costs associated with the production process, including costs related to factory equipment maintenance, utilities, and quality control.

Direct Materials Cost

The cost of raw materials and components used to create a product.

Operations

The day-to-day activities necessary for a business or organization to function, including production, supply chain management, and distribution.