Questions: Saved The best objective when faced with limited resources is to maximize: Multiple Choice the gross profit per unit of the constraining resource. the contribution margin per unit of the constraining resource. production of the product with the highest customer demand. production of the product with the highest selling price.

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The best objective when faced with limited resources is to maximize:

Multiple Choice
the gross profit per unit of the constraining resource.
the contribution margin per unit of the constraining resource.
production of the product with the highest customer demand.
production of the product with the highest selling price.
Transcript text: Saved The best objective when faced with limited resources is to maximize: Multiple Choice the gross profit per unit of the constraining resource. the contribution margin per unit of the constraining resource. production of the product with the highest customer demand. production of the product with the highest selling price.
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Solution

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The answer is the second one: the contribution margin per unit of the constraining resource.

Explanation for each option:

  1. The gross profit per unit of the constraining resource: Gross profit is the difference between sales and the cost of goods sold. While important, it does not directly address the efficiency of using the constraining resource.

  2. The contribution margin per unit of the constraining resource: Contribution margin is the difference between sales revenue and variable costs. Maximizing the contribution margin per unit of the constraining resource ensures that the limited resource is used in the most profitable way, contributing the most to covering fixed costs and generating profit.

  3. Production of the product with the highest customer demand: High customer demand is important, but it does not necessarily mean that the product is the most profitable use of the constraining resource.

  4. Production of the product with the highest selling price: A high selling price does not guarantee the highest profitability, as it does not account for the costs associated with producing the product or the efficiency of using the constraining resource.

Summary: When faced with limited resources, the best objective is to maximize the contribution margin per unit of the constraining resource, as this ensures the most efficient and profitable use of the limited resource.

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