Lanny Discovers That the Bottleneck Is the Riveting Machine So

question 121

True/False

Lanny discovers that the bottleneck is the riveting machine so he schedules all production around when that machine is available. This is an example of elevating the constraint in the five-step constraint management process.

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Definitions:

Variable Capital

The portion of capital represented by expenditures on items such as wages, materials, and fuel, which vary directly with the level of production.

Wage Rate

The wage rate is the amount of compensation a worker receives per unit of time worked, often expressed per hour or per year.

Marginal Revenue Product

The extra revenue generated by employing one additional unit of a resource, such as labor or capital.

Diminishing Marginal Returns

A principle stating that after an optimal point, further increases in one input while holding others constant will result in smaller and smaller gains in output.