Capacity constraints exist in all forms of business. Owners must consider these constraints when setting off in an effort to make sure they understand the break even and profit points their business holds.

 

Consider the different types of capacity constraints that might be involved with the business you chose in Module 01.

• In a 1-2 page paper, list a minimum of three types of capacity constraints that would potentially play a part in the business type.

 

• How would you use absorption costing to reduce the overall risks associated with these constraints?

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