In a business unit, the goal of maximum profit depends on how the resources are allocated among different projects. Economically speaking by Efficient Allocation of resources, we mean the distribution of available resources in such a way that all resources are fully utilized and there are increasing returns to scale.In a business organization allocation of resources comes under the Resource management category.
Everybody knows that the todays world is subject to limited resources while the human wants are unlimited.So the resources must be allocated effectively not only to earn profits but also to save mankind from scarcity.
As we know that there are four factors of production; land, labour, capital and entrepreneur.Hence the resources can also be categorized accordingly:
- Human resources
- Investment resources
- Land resources
