How can ABC information be used to manage constrained resources?
A) ABC information cannot be used to manage constrained resources
B) ABC information can help managers identify the best way to relax constraints
C) ABC information can help managers decrease the rate at which products get through the manufacturing process
D) ABC information can help managers justify price increases due to constrained resources

Question

Quizplus · Accepted Answer

ABC information can help managers identify the best way to relax constraints by providing detailed information on the cost drivers of each product or activity. This information can help managers prioritize which products or activities to invest in to increase efficiency and reduce costs, ultimately relaxing constraints. For example, if a certain product requires a specific machine that is causing a bottleneck in the production process, managers can use ABC information to identify the total cost and profitability of that product and determine if investing in additional machines or reallocating resources is a feasible solution.

How Can ABC Information Be Used to Manage Constrained Resources