To maximize profit when a constrained resource exists, management should produce the sales mix which has the highest contribution margin per unit of scarce resource.

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Quizplus · Accepted Answer

This is known as the "optimal product mix" approach, where businesses identify the most profitable combination of products to produce by considering the limited availability of a specific resource. By producing and selling products with the highest contribution margin per unit of the constrained resource, the business can maximize its profit.

To Maximize Profit When a Constrained Resource Exists, Management Should