MGSC 395 EXAM 2 VERIFIED STUDY GUIDE
theory of constraints - systematic management approach that focuses on actively
managing those constraints that impede a firm's progress toward its goal of maximizing
profits and effectively using rescources
constraint - any factor that limits the performance of a system and restricts its output
types of constraints - -physical: machine, labor, work cells, material, space, quality
-demand: shortages of demand, work stoppages at customers
-management: policies, metrics, mindsets
throughput time - total elapsed time from the start to the finish of a job or a customer
being processed at one or more work centers
idle time - the total unproductive time for all stations in the assembly of each unit
(total available time - total work time)
efficiency - the ratio of productive time to total time, expressed as a percent
balance delay - the amount by which efficiency falls short of 100%
linear programming - an optimization technique that is useful for allocating scarce
resources among competing standards
objective function - states mathematically what is being maximized or minimized
decision variable - choices the decision maker can control
constraints - limitations that restrict the permissible choices for the decision
feasible region - all permissible combinations of the decision variable
parameters - choices the decision maker does not control and cannot change when the
solution is implemented
linearity - objective function is assumed to be linear
non-negativity - decision variables must be positive or zero
reduced cost - how must the objective function coefficient of a decision variable must
improve before the optimal solution changes and the decision variable "enters" the
solution with some positive number
theory of constraints - systematic management approach that focuses on actively
managing those constraints that impede a firm's progress toward its goal of maximizing
profits and effectively using rescources
constraint - any factor that limits the performance of a system and restricts its output
types of constraints - -physical: machine, labor, work cells, material, space, quality
-demand: shortages of demand, work stoppages at customers
-management: policies, metrics, mindsets
throughput time - total elapsed time from the start to the finish of a job or a customer
being processed at one or more work centers
idle time - the total unproductive time for all stations in the assembly of each unit
(total available time - total work time)
efficiency - the ratio of productive time to total time, expressed as a percent
balance delay - the amount by which efficiency falls short of 100%
linear programming - an optimization technique that is useful for allocating scarce
resources among competing standards
objective function - states mathematically what is being maximized or minimized
decision variable - choices the decision maker can control
constraints - limitations that restrict the permissible choices for the decision
feasible region - all permissible combinations of the decision variable
parameters - choices the decision maker does not control and cannot change when the
solution is implemented
linearity - objective function is assumed to be linear
non-negativity - decision variables must be positive or zero
reduced cost - how must the objective function coefficient of a decision variable must
improve before the optimal solution changes and the decision variable "enters" the
solution with some positive number
