Note the impact on costs per unit re relevance. There is a potential to use this idle capacity to earn even more margin. However, if we can use this capacity to earn more margin, we have to refine the decision model. Therefore, as long as a customer is contributing margin, and you can't get a better customer, it is better to keep poor customers than to get rid of them. All companies have limited resources.
Most companies produce a variety of products or services.
It takes 1 hr of machine time to make. It takes 2 hours of machine time to make. Note hours is the constrained resource. Unfortunately managers will be forced to make 'bad' decisions in order to protect their bonuses or even their jobs.