ECONOMICS

Factory production possibility curve

Harbor Works uses this production possibility curve to discuss its weekly assembly trade-off. Bikes and scooters share workers, paint booths, components and final inspection stations. The frontier shows all efficient combinations that can be produced with the current factory setup. The dealer order mix is on the curve, while the parts-shortage point falls inside it because capacity is waiting for components. The graph is not a sales forecast; it is a compact way to separate demand choices from the physical limits of production and to show the opportunity cost of shifting the mix. It gives teams a concrete starting point for reviewing assumptions, data quality and next steps together.

UPDATED 2026-09-25
TYPEEcon
EXAMPLEFactory production possibility curve
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CASE ANALYSIS

Scenario

A factory plans a weekly assembly mix.

Key decisions

  • Confirm capacity: Use labour and assembly stations.
  • Meet demand: Select a feasible dealer mix.
  • Resolve shortages: Move an interior point toward the frontier.

When to reuse this

Use when products share production labour and equipment.

FAQ

Frequently asked questions

What is opportunity cost on this curve?01
It is the scooters given up when the factory produces additional bikes, or the reverse.
What causes the curve to shift?02
Extra stations, workers, components or better processes can expand weekly capacity.
Can an order mix be outside the curve?03
Yes, but it is not feasible without changing capacity or extending the time period.
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