Quick Reference

The effective constraint on the maximum speed or level of an activity. Its use in economics is a physical analogy to the maximum rate at which a liquid can be poured through the neck of a bottle. In production, transport, or administration, the effective constraint is often a shortage of some specific form of labour or some particular piece of equipment. A major role of efficient management is to observe and remedy bottlenecks as they arise, or still better to foresee them and take action in time to prevent them from emerging.

Subjects: Economics.

Reference entries