The Objective of the Theory of Constraints Is to Increase

question 171

Multiple Choice

The objective of the theory of constraints is to increase throughput contribution (sales dollars minus direct materials costs) ,minimize investments,and manage production by

• A)letting the bottleneck set the pace for the rest of operations.
• B)hiring more direct labor.
• C)increasing distribution channels.
• D)increasing production facilities.

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Definitions:

Complements

Products or services that are often used together, such that the demand for one increases the demand for the other.

Price

The sum of currency anticipated, required, or given in transaction for something.

Demand

The desire and ability of consumers to purchase goods and services at various prices.

Law of Demand

States that, all other factors being equal, as the price of a good increases, demand for that good decreases, and vice versa.