PACC440SolutionsTO.docVIP

The Theory of Constraints and Throughput Accounting, Version 1.0 Solutions to Assigned Homework 1. Solutions to self-test questions. The drum-buffer-rope system is used to manage production schedules around a constraint. The drum communicates the speed of the constraint so that all processes can coordinate their efforts to coincide with the production constraint. The rope keeps all processes in front of the constraint from getting too far ahead. And finally, the buffer in front of the constraint should include just enough WIP inventory to handle any typical halts that potentially could hinder the production of the constraint. The five steps in the TOC process are: Identify the system’s constraint(s). Decide how to exploit the constraint(s). Subordinate everything else to the above decision. Elevate the constraint(s). If the constraint has been broken, go back to step 1. Process Not enough workers to complete a process One machine is slower than all others Policy Overtime freeze Purchasing restriction Logistic Specified batch sizes Particular processing sequence Material Mining regulations Freeze in Florida Market Obsolete product Downtrend in the economy h. Throughput accounting is used to support a very specific managerial view of an operation—the implementation of TOC in an organization. The focal point of throughput accounting is on the incremental value of more effective employment of a constraint. The focus is very short-term. Throughput accounting does not necessarily provide data useful for long-term strategic planning objectives. Benefit: Avoids local optimization. The system will not succeed if one or more individual processes are continually being rewarded for optimizing individual production. However, throughput accounting helps avoid such sub-optimization by encouraging cooperation to accomplish the organization’s profit goals. Benefit: Improves communication between departments. The focus of everyone must be on the large-s