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ABC Company uses throughput accounting. Machine time is the current binding constraint on production output, and management are looking for ways to increase the throughput accounting (TA) ratio for a product that the machine is used to manufacture.
Which of the following will have NO effect on the TA ratio?1. The answer is “Reducing the machine time per unit to make the product”.
2. Currently the machine time is the bottleneck. Therefore by reducing time per unit of the machine, efficiency is achieved. This improves the throughput per hour3. Could you please tell me where is my mistake?
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