Quiz 23: Theory of Constraints

OPT stands for optimal purchasing technique.

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

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

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."

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.

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

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

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.

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

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

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

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.

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

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

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

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.

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

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

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

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

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

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

Transfer batch is another term for process batch.

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.

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

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

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

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

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

The synchronous manufacturing approach uses backward scheduling.

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.

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

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.

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

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

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

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

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

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

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

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

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.

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.

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.

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

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

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

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

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

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

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

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.

Which of the following is not an important concept in TOC? A)CCR B)Rope C)Drum D)Buffer E)File

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

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.