The best way to allocate scare resources to attain a specific objective, such as the maximization of operating income, is to use:
A) Relevant costing.
B) A value-stream analysis of the decision alternatives.
C) Simple regression (OLS) analysis.
D) Activity-based costing (ABC).
E) Linear programming (i.e., constrained optimization analysis).

Question

Quizplus · Accepted Answer

Linear programming is the best choice to allocate scarce resources because it is a mathematical optimization technique that can help identify the most efficient way to allocate resources to achieve a specific objective, subject to constraints. It takes into account multiple decision variables and limitations and can optimize for both cost and revenue objectives. Therefore, it is the best tool to maximize operating income under resource constraints.

The Best Way to Allocate Scare Resources to Attain a Specific