When faced with capacity constraints, managers should:
A) maximise contribution margin per unit
B) maximise profit per unit
C) maximise contribution margin per unit of constrained resource
D) reduce the number of products available

Question

Quizplus · Accepted Answer

Maximizing contribution margin per unit of constrained resource is the most effective strategy when dealing with capacity constraints. This approach ensures that the limited resources are used in the most profitable way, focusing on products that provide the highest return relative to the constraint.

When Faced with Capacity Constraints, Managers Should