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Planning with limiting factors
Step 5: Allocate resources using this ranking and answer the question, i.e.
state the maximum contribution.
Taking these factors into account, the production schedule becomes:
Units produced Labour Cumulative Limiting
hours labour hours factors
Product A 1,000 1,200 1,200 Policy to
produce 1,000
units
Product B 6,000 2,400 3,600 Sales
Product C 1,750 1,400 5,000 Labour hours
The maximum contribution is therefore as follows:
$
A (1,000 × $6) 6,000
B (1,750 × $5) 8,750
C (6,000 × $4) 24,000
––––––
38,750
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