Limiting factor
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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.
