Limiting factor: Difference between revisions

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In practice there may well be multiple limiting factors.
In practice there may well be multiple limiting factors.
In a simple case with a single limiting factor, total contribution and total profit are maximised by focusing on the production that produces the greatest contribution per unit of the limiting factor.




== See also ==
== See also ==
* [[Contribution]]
* [[Contribution]]
* [[Contribution analysis]]
* [[Factors of production]]
* [[Factors of production]]
* [[Production possibility curves]]
* [[Production possibility curves]]

Latest revision as of 09:04, 20 March 2019

Cost and management accounting.

A limiting factor is an input resource which is scarce.

Also known as a scarce resource or key factor.


In different simple situations the most important limiting factor may be skilled labour, a physical resource, time, or something else.

In practice there may well be multiple limiting factors.


In a simple case with a single limiting factor, total contribution and total profit are maximised by focusing on the production that produces the greatest contribution per unit of the limiting factor.


See also