Deck 23: Theory of Constraints

Question 1

From an operations standpoint, one of the goals of the firm under the theory of constraints is to increase throughput while simultaneously reducing inventory and reducing operating expense.

Answer 1

True

Question 2

The operational measure of throughput is "the rate at which money is generated by the system through production of goods and services that might be sold."

Answer 2

False

Question 3

According to the theory of constraints, a non-bottleneck is any resource where capacity is less than the demand placed on it.

Answer 3

False

Question 4

Synchronous manufacturing refers to the entire production process working together in harmony to achieve the goals of the firm.

Question 5

An MRP system can allow for product rejects by building a larger batch than is demanded, but a JIT system cannot tolerate poor quality.

Question 6

A synchronous manufacturing system does not have excess capacity throughout the system, except for the bottleneck.

Question 7

Mr.Goldratt's "theory of constraints" is useful only in manufacturing settings.

Question 8

OPT stands for optimal purchasing technique.

Question 9

According to the theory of constraints, capacity is the time available for production.

Question 10

According to the theory of constraints, it is wrong for manufacturers to try to match capacity with demand by attempting to balance capacity across a sequence of processes.Unbalanced capacity is better.

Question 11

One way to find a bottleneck is to run a capacity resource profile.

Question 12

Dr.Eli Goldratt feels that the goal of a firm is to make useful products efficiently.

Question 13

According to the theory of constraints, a bottleneck is any resource whose capacity is greater than the demand placed on it.

Question 14

On an assembly line, a process batch can be infinite.

Question 15

A way to find a bottleneck is to use one's knowledge of a particular plant, look at the system in operation, and talk with supervisors and workers.

Question 16

According to the theory of constraints, a capacity-constrained resource (CCR) is one whose utilization is close to capacity and could be a bottleneck if it is not scheduled carefully.

Question 17

According to the theory of constraints, the term "productivity" is defined as all those actions that bring a company closer to its goals.

Question 18

According to the theory of constraints, throughput is the rate at which money is generated by the system through sales.

Question 19

According to the theory of constraints, throughput is the rate at which product is passed through the manufacturing system.

Question 20

Buffer inventory in front of a bottleneck is called a time buffer.

Question 21

Transfer batch is another term for process batch.

Question 22

In a process sequence where a product flows from process A to process B, process B is called the contingent process.

Question 23

The "dollar days" inventory measurement may be used to focus management's attention on where inventory is located.

Question 24

Larger transfer batches give shorter lead times and lower inventories, and there is more material handling than smaller transfer batches.

Question 25

The "dollar days" inventory measurement can be used in purchasing to discourage large work-in-process and producing earlier than is needed.

Question 26

The "dollar days" inventory measurement results from a complex algorithm used to compute individual units of inventory and their respective ordering and holding costs.

Question 27

In a process sequence where a product flows from process A to process B, process B is called the dependent process.

Question 28

Rather than try to adjust the master production schedule to change resource loads, it is more practical to control the flow at each bottleneck or CCR to bring capacities in line.

Question 29

In a process sequence where a product flows from process A to process B, process A is called the mother process.

Question 30

The synchronous manufacturing approach uses backward scheduling.

Question 31

The effects of statistical variations in processing times in a dependent sequence will eventually cancel themselves out due to the law of averages.

Question 32

Because of statistical fluctuation (processing times vary around an average processing time), dependent sequences can operate without any inventory between workstations.

Question 33

JIT requires a stable production level.When compared to synchronous manufacturing, this is viewed as a negative aspect of JIT.

Question 34

The term "dependent events" refers to a process sequence.

Question 35

Smaller transfer batches give lower work-in-process inventory and faster product flow.

Question 36

On an assembly line, a transfer batch can be one unit.

Question 37

A process batch should be no larger than the transfer batch.

Question 38

JIT requires work-in-process when used with kanban so there is inventory to pull.When compared to synchronous manufacturing, this is viewed as a negative aspect of JIT.

Question 39

Looking at the loads that are placed on each resource by the products that are scheduled through them is called process flow profiling.

Question 40

Departments within a firm often are at odds with each other because reward systems are often not synchronized with the basic goal of the firm: to make money.

Question 41

According to the theory of constraints, which of the following is an operational measurement that can be used to measure the firm's ability to make money?

A)Inventory
B)Sales
C)Operating revenue
D)Unit cost
E)Overhead per unit

Question 42

According to the theory of constraints, which of the following can be a CCR?

A)Factory layout
B)Product design
C)An employee
D)A customer
E)Sales literature

Question 43

Which of the following is one of Dr.Eli Goldratt's rules of production scheduling for optimized production technology?

A)Utilization and activation of a resource are not the same.
B)Do not allow bottlenecks to govern the flow of the line.
C)An hour lost at a bottleneck saves an hour for the entire system.
D)Balance the capacities, not the flows.
E)The level of utilization of a bottleneck resource is not determined by its own potential but by some other constraint in the system.

Question 44

Which of the following is a "focusing step" of Dr.Eli Goldratt's theory of constraints?

A)Reduce system constraints.
B)Reinforce system constraints.
C)Support system constraints.
D)If you have no system constraints, make some.
E)Identify system constraints.

Question 45

Which of the following is an approach to dealing with a bottleneck?

A)Keep a buffer inventory in front of it to ensure that it always has something to work on.
B)Use Johnson's sequencing rules on bottleneck operations.
C)Don't worry about the bottleneck; it will take care of itself.
D)Move things to a faster bottleneck.
E)Pay an incentive bonus to workers on the bottleneck operation.

Question 46

A useful measure of inventory performance is called "dollar days." In which of the following areas are dollar days measurements not useful?

A)Marketing
B)Research and development
C)Manufacturing
D)Project management
E)Purchasing

Question 47

According to the theory of constraints, which of the following is a financial measurement that can be used to measure the firm's ability to make money?

A)Operating expenses
B)Cash flow
C)Inventory
D)Sales
E)Dividends

Question 48

According to the theory of constraints, which of the following is an operational measurement that can be used to measure the firm's ability to make money?

A)Net profit
B)Throughput
C)Return on investment
D)Sales
E)Direct labor hours

Question 49

Which of the following is one of Dr.Eli Goldratt's rules of production scheduling for optimized production technology?

A)If you lose an hour at a bottleneck, it is better than making scrap.
B)Do not balance capacity, balance the flow.
C)Do not allow bottlenecks to govern the flow of the line.
D)An hour saved at a bottleneck operation is a mirage.
E)The amount in a process batch should be fixed when the batch is begun and not changed over time or along its route.

Question 50

Which of the following is a negative aspect of JIT compared to synchronous manufacturing?

A)JIT cannot deal with outside vendors.
B)JIT needs broadly fluctuating production levels.
C)JIT does not allow very much flexibility in the products produced.
D)JIT requires a great deal of workforce computational skills.
E)JIT does not deal well with bottlenecks.

Question 51

Statistical fluctuation refers to the normal variation about a mean or average.

Question 52

Which of the following is not an important concept in TOC?

A)CCR
B)Rope
C)Drum
D)Buffer
E)File

Question 53

According to the theory of constraints, which of the following is a financial measurement that can be used to measure the firm's ability to make money?

A)Net profit
B)Throughput
C)Inventory
D)Sales
E)Retained earnings

Question 54

According to the theory of constraints, which of the following is a kind of time that makes up the cycle time in production?

A)Quality time
B)Break time
C)Research time
D)Just-in-time
E)Idle time

Question 55

According to the theory of constraints, which of the following is a kind of time that makes up the cycle time in production?

A)Process time
B)Starting time
C)Quitting time
D)Information time
E)Finish time