To maximize operating income,the manager:
A)maximizes the contribution margin of the constrained,or bottleneck resource.
B)minimizes the contribution margin of the constrained,or bottleneck resource.
C)eliminates the contribution margin of the constrained,or bottleneck resource.
D)disregards the contribution margin of the constrained,or bottleneck resource.
E)stops the assembly operation process from running to eliminate work.

Question

Quizplus · Accepted Answer

Maximizing the contribution margin of the constrained, or bottleneck resource can help increase operating income because this resource is limiting production and therefore limiting the amount of revenue that can be generated. By focusing on increasing the contribution margin of this resource, the manager can ensure that the limited resources are being used in the most profitable way possible. This can lead to increased revenue and ultimately higher operating income. Minimizing or eliminating the contribution margin of the constrained resource would not be beneficial, as it would only further limit production and revenue. Disregarding the contribution margin of the constrained resource would also be detrimental to operating income. Finally, stopping the assembly operation process from running would eliminate work and revenue generation, and would not lead to an increase in operating income.

To Maximize Operating Income,the Manager