The Opportunity Cost of Using a Unit of the Constrained

question 50

True/False

The opportunity cost of using a unit of the constrained resource in a volume trade-off decision is determined by the profitability index of the company's least profitable product--even if none of that product is currently being made.

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Definitions:

Executive

Pertains to high-level management roles in organizations, responsible for making major decisions and directing overall operations.

Personality

A combination of emotional, attitudinal, and behavioral response patterns of an individual that are characteristic over time and across situations.

Gratification

The state of being pleased or fulfilled.

Desires

Intense desires or aspirations for something to occur or exist.