In the context of economics and business operations, which constraint prevents a firm from creating an order for a customer who does not exist in its records?

• A. Existence constraint
• B. Scarcity constraint
• C. Rationality constraint
• D. Budget constraint

Answer: (A)

Verified step by step guidance

1. Understand that in economics and business operations, constraints are rules or limitations that affect decision-making and processes within a firm.
2. Identify that the question is about a constraint that prevents a firm from creating an order for a customer who does not exist in its records, which relates to data or record-keeping limitations.
3. Recognize that the 'Existence constraint' refers to the requirement that certain entities (like customers) must exist in the system before related actions (like creating orders) can be performed.
4. Contrast this with other constraints: 'Scarcity constraint' relates to limited resources, 'Rationality constraint' relates to decision-making behavior, and 'Budget constraint' relates to financial limits.
5. Conclude that the 'Existence constraint' is the specific rule that prevents creating an order for a non-existent customer, as it ensures that all referenced entities must be present in the firm's records before transactions can proceed.