Question :

1) For the past five years, the RS Company has produced and sold electronic magnets to chemistry labs throughout the United States. Recently, a strong competitor has entered the market and RS is considering whether it should continue to produce and sell the electronic magnets. The following information has been gathered to assist management in their decision:

A) The machinery used to manufacture the magnet was purchased five-years ago for $500,000.

B) Four of the employees who manufacture magnets would be transferred to the magnifying glass division.

C) The space now used to produce the magnets would be used to remove the need to rent warehouse space.

D) Sales volume (units) is evaluated to drop by 50% once the competitor becomes fully operational.

Which of the items listed above is relevant to the decision to continue the production and sale of the electronic magnets?

a) A and C.

b) B and C.

c) C and D.

d) A, B, and D.

e) B, C, and D.

2) which of the subsequent statements about the theory of constraints is true?

(A) The theory of constraints focuses on evaluating the optimal product mix when one or more resources restrict the attainment of an objective or goal.

(B) The theory of constraints focuses on maximizing the rate of throughput contribution while minimizing investment and other operating costs.

a) only A.

b) only B.

c) neither A nor B is true.

d) both A and B are true.