- This topic has 1 reply, 2 voices, and was last updated 3 days ago by
.
- Posts
Which of the following statements is NOT consistent with the theory of constraints?
A.There is no inventory of work in progress or finished good held
B.Raw materials are converted into sales as quickly as possible
C.Operations prior to the bottleneck operate at the same level as the bottleneck
D.Conversion costs and investment costs are kept to a minimumAnswer is A, I understand that, I get all the options except D?
Sir, how is D consistent with TOC, I did not really understand how is this relevant to TOC?Option D, is consistent because TOC emphasises maximising throughput while minimising operating expenses.
By keeping conversion costs low, organisation’s can improve their overall efficiency and profitability.
This focus on minimising costs aligns with the TOC principle of optimising the system’s performance by addressing constraints and ensuring resources are used effectively.
- You must be logged in to reply to this topic.