Adirondack Designs, Inc., produces wooden furniture in a sequential process involving four departments: cutting, assembly, finishing, and packaging. Limited labor time available in the finishing department exerts a limiting constraint on the output of the company. According to the Theory of Constraints, optimal use of the time available in the finishing department requires:

Question

Quizplus · Accepted Answer

The Theory of Constraints focuses on maximizing throughput by optimizing the performance of the bottleneck, in this case, the finishing department. Producing the product with the largest contribution margin per hour of time available in the finishing department ensures the most efficient use of the constrained resource to maximize profits.