A constrained resource is something that you have a limited amount of. In a manufacturing business it may be machine time, labor hours or raw materials.

What is an example of resource constraint?

When we talk about resource constraints, the usual ones come to mind: food, oil and water. However we should also consider metals, phosphorous, gas and land. All are under pressure – some more extreme than others. At current rates of consumption, there are real physical constraints on several important materials.

Why are constrained resources important?

Resource constraints can cause an organization to operate more efficiently, according to the MIT Sloan Management Review. For example, a small company faced with financial restrictions may, instead of hiring four contractors for technical support, hire two who can accomplish the work for the same amount of money.