ITPEC IP April 2018 Question 66

Source exam: ITPEC IP April 2018Topic: Corporate Activities

ITPEC IP April 2018 — Question 66 of 100

The maximum production is six units because raw material A is the limiting resource. Material A supports 60 / 10 = 6 units, while material B supports 40 / 5 = 8 units. Production cannot exceed the smaller of these capacities because every finished unit requires both materials.

Answer (b)

Why not others:
- four units leave usable quantities of both materials unnecessarily unused

- eight units require 80 kg of A, exceeding the available 60 kg

- ten units exceed both available material quantities

Key rule: With multiple required resources, maximum output is determined by the most restrictive resource capacity, or bottleneck.

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