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A dedicated pharmaceutical plant uses the theory of constraints and has three processes: Mixing, Encapsulating, and Packaging. For Mixing, sufficient materials are released to produce 4,000 packages of product per day. Encapsulating has a buffer inventory of 8,000 units (work in process from Mixing). Packaging produces 4,000 units per day. Which of the three processes sets the production rate of 4,000 units per day? a. The Mixing Department b. The Encapsulating Department c. The Packaging Department d. Cannot be determined

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Cornerstones of Cost Management (C...

4th Edition
Don R. Hansen + 1 other
Publisher: Cengage Learning
ISBN: 9781305970663

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Section
BuyFindarrow_forward

Cornerstones of Cost Management (C...

4th Edition
Don R. Hansen + 1 other
Publisher: Cengage Learning
ISBN: 9781305970663
Chapter 20, Problem 22E
Textbook Problem
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A dedicated pharmaceutical plant uses the theory of constraints and has three processes: Mixing, Encapsulating, and Packaging. For Mixing, sufficient materials are released to produce 4,000 packages of product per day. Encapsulating has a buffer inventory of 8,000 units (work in process from Mixing). Packaging produces 4,000 units per day. Which of the three processes sets the production rate of 4,000 units per day?

  1. a. The Mixing Department
  2. b. The Encapsulating Department
  3. c. The Packaging Department
  4. d. Cannot be determined

To determine

Identify the option that processes the three sets of production rate of 4,000 units per day.

Explanation of Solution

Theory of constraint: Making money in the future by managing constraints is the main goal of the theory of constraints. The theory of constraints (TOC) recognizes the performance of origination with constraints volume and it develops a specific approach to focus the system level effects of the continuous improvement.

In general, the drummer constraint sets the production rate of the factory, and the succeeding operation of a factory must match with the production rate of the drummer constraint. In order to release sufficient materials to ensure the outcome of the business, the preceding operation rate is controlled by tying the rate of production with the first operation...

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Chapter 20 Solutions

Cornerstones of Cost Management (Cornerstones Series)
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