Materials Shortage

Constraining (Limiting) Factor
A constraining factor, also known as a limiting factor, is an element that restricts or limits the production or sale of a given product. Nearly all firms encounter one or more constraining factors, which could involve limited machine-hours and labor-hours, shortages of materials and skilled labor, or restrictions related to display space, warehouse space, and working capital.

Accounting Terms Lexicon

Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.