Q: How do you work out the best option with a limiting factor?

You need to calculate the ‘contribution per limiting factor’.

You need to calculate the ‘contribution per limiting factor’. If, for example, there is a shortage of a particular material, and several products require it, it makes sense to allocate it to the most profitable products. The contribution technique allows you to identify these, rank them in order of profitability, and allocate the material to maximise the profits.

...

To continue reading this article you need to be registered with Recruiter . Registration is FREE and only takes minutes. Register here or sign in below if you already have an account.

Already registered? Login

Don't have an account?

Register for FREE today to access all premium online content and select your email preference.

We're here to help

If you have queries about accessing premium content, contact a Recruiter sidekick at [email protected] for more information or call +44 (0) 208 950 9117.

Top