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while solving Throughput accounting , if any question says a company makes 2 products that passes through 2 departments and limitations are there in both 2 departments respective to machine hours……..we choose the bottleneck resource as that one which is the lowest one and since demand of the 2 products are given we use throughput accounting based on Throughput accounting ratio.
But in case demands aren’t given for those 2 products…..then we switch over to linear programming to solve it as there are 2 limitation departments
Its that how its different.
The demand is not relevant for calculating the throughput accounting ratio.
When decided on the bottleneck resource is the time taken for each unit in the resource that is relevant.
Have you watched my free lectures on this?
yes i know demand isn’t required in case of throughput accounting.
but i want to segregate which problem can be solved by throughput accounting and which can be solved by linear programing.
how to know in a question, there is 1 limiting factor or more than 1 limiting factor.
in linear programming example
Peter makes two types of chair – the ‘Executive’ and the ‘Standard’.
The data relating to each as follows:
Standard Executive
Materials 2 kg 4 kg
Labour 5 hours 6 hours
Contribution $6 $9
There is a maximum of 80 kg of material available each week and 180 labour hours per week.
Demand for ‘Standard’ chairs is unlimited, but maximum weekly demand for ‘Executive’ chairs is 10.since here demand for standard chair is unlimited and demand for executive is 10……..so we solve it though linear programming to get optimal production plan and cant use throughput here.
But suppose a specified demand is there in this particular question for standard chairs as well as executive chairs……..and available material and labour hr isnt enough to meet the required demand for both standard and executive chairs, then we can use the least available resources as bottleneck resource and could solve it through throughput accounting right by making use of bottleneck resource where throughput return per resource is high.
thats what im trying to make sure, in exam how do i segregate a limiting factor question……weather to be solve by throughput / linear.
so just by specifying the demand for standard chairs in above question the examiner changes the solution from linear to throughput ….isnt that right sir
so in exam i can be lookout for such things…..just clarify me
No. Throughput accounting is only relevant in the exam when you are specifically asked for throughput accounting. Throughput accounting is anyway only relevant if the only constraint is machine time. If there is more than one constraint then it cannot be throughput accounting and has to be linear programming.
Again, have you watched my free lectures on both topics?
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