Bryan Inc. produces a specialty top-quality juice machine. The product, the JM50, requires four processes to be completed. Specifically, these processes are exterior construction, pulp filter insertion, painting, and packaging. Each process is performed at separate workstations with different completion rates:
Exterior construction can manufacture 100,000 juicer exteriors per day.
Pulp filter insertion can install 25,000 filters every 6 hours.
Painting can decorate 3,000 juicers every half hour.
Packaging can package 5,000 juicers per hour.
The plant operates 24/7, 24 hours a day every day of the week.
What cost management technique does this case illustrate? (Assume an average 30-day month.)
A) Target costing.
B) Theory of constraints.
C) Life-cycle costing.
D) ABC analysis.

Question

Quizplus · Accepted Answer

This case illustrates the Theory of Constraints (TOC) as the production process has four different workstations with different completion rates. The slowest workstation limits the overall production rate, and the focus is on identifying and improving the bottleneck to increase overall efficiency.

Bryan Inc Produces a Specialty Top-Quality Juice Machine