TOC || 100% SOLVED Q&A!!
Theory of Constraints correct answers Focuses on constraints/bottlenecks
3 Key Financial Performance Measures correct answers 1. Throughput
2. Inventory
3. Operating Expense
Throughput correct answers Rate which manufacturing firm sells finished goods
Not synonymous with production rate
Inventory correct answers Money firm invested in purchasing things it intends to sell
Operating Expense correct answers Cost of converting inventory into throughput
New pie chart correct answers Labor cost becomes fixed cost and gets lumped with overhead
Constraints correct answers Internal Resources --> bottleneck machine
Market Related --> demand level
Policy Related --> no work on weekends
Procedure for dealing with constraints (5) correct answers 1. Identify primary constraint
2. Exploit constraint
3. Subordinate everything else to constraint
4. Elevate constraint
5. If constraint is eliminated, go back
10 Rules of TOC correct answers 1. Utilization + activation of resource are not synonymous
2. Level of utilization of non-bottleneck determined by other constraint
3. Hour lost in bottleneck is hour lost in system
4. Hour saved on non-bottleneck is mirage
5. Bottleneck governs throughput and inventory
6. Transfer batch size shouldn't = production batch size
7. Production batch size shouldn't be same in each stage of process
8. Capacity and priority considered together
9. Balance flow, not capacity
10. Sum of local optima doesn't equal optimum
Resource Sequences correct answers Bottleneck prior to non-bottleneck
Non-bottleneck prior to bottleneck
Non-bottleneck and bottleneck prior to assembly stage
Non-bottleneck and bottleneck independent
Bottleneck prior to non-bottleneck correct answers Non-bottleneck should only run when
available parts from bottleneck
Non-bottleneck prior to bottleneck correct answers Non-bottleneck paced to match rate of
bottleneck
Theory of Constraints correct answers Focuses on constraints/bottlenecks
3 Key Financial Performance Measures correct answers 1. Throughput
2. Inventory
3. Operating Expense
Throughput correct answers Rate which manufacturing firm sells finished goods
Not synonymous with production rate
Inventory correct answers Money firm invested in purchasing things it intends to sell
Operating Expense correct answers Cost of converting inventory into throughput
New pie chart correct answers Labor cost becomes fixed cost and gets lumped with overhead
Constraints correct answers Internal Resources --> bottleneck machine
Market Related --> demand level
Policy Related --> no work on weekends
Procedure for dealing with constraints (5) correct answers 1. Identify primary constraint
2. Exploit constraint
3. Subordinate everything else to constraint
4. Elevate constraint
5. If constraint is eliminated, go back
10 Rules of TOC correct answers 1. Utilization + activation of resource are not synonymous
2. Level of utilization of non-bottleneck determined by other constraint
3. Hour lost in bottleneck is hour lost in system
4. Hour saved on non-bottleneck is mirage
5. Bottleneck governs throughput and inventory
6. Transfer batch size shouldn't = production batch size
7. Production batch size shouldn't be same in each stage of process
8. Capacity and priority considered together
9. Balance flow, not capacity
10. Sum of local optima doesn't equal optimum
Resource Sequences correct answers Bottleneck prior to non-bottleneck
Non-bottleneck prior to bottleneck
Non-bottleneck and bottleneck prior to assembly stage
Non-bottleneck and bottleneck independent
Bottleneck prior to non-bottleneck correct answers Non-bottleneck should only run when
available parts from bottleneck
Non-bottleneck prior to bottleneck correct answers Non-bottleneck paced to match rate of
bottleneck
