Chapter 5: Throughput Accounting Flashcards
1
Q
What is the theory of constraints (TOC)
A
a concept that states you can only produce products as fast as your slowest department will allow.
2
Q
What does TOC stand for
A
Theory of constraints
3
Q
Who sets the pace of the entire operation
A
The bottleneck aka the slowest department
4
Q
What is the throughput accounting ratio?
A
Return per factory hour / Cost per factory hour
5
Q
What are the two main goals of TA?
A
Throughput Maximisation and Inventory Minimisation
6
Q
True or false: Cost control is a focus of TA
A
False
7
Q
True or false: TA is primarily for the long term
A
False
8
Q
A
