The company may hire salespeople, for example, who are so good that they generate orders faster than the factory can produce. Delivery delays increase and customers are lost, because production capacity is the most limiting factor. So the managers expand the capital stock of production plants. New people are hired in a hurry and trained too little. Quality suffers and customers are lost because labor skill is the most limiting factor. So management invests in worker training. Quality improves, new orders pour in, and the order-fulfillment and record-keeping system clogs. And so forth.
