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Dear all,
Reference to the 2nd article written in the Student accountant recently talking about throughput accounting , and particularly the example (2) of the three machine X,Y and Z.
My question is how did the writer calculate the “Additional sales” for each of the machines X=100, Z&Y =300 and Z,Y & X=500 ? since I did not understand his calculations.Could any body assist me in that,.
Appreciated your quick response
Initially the company has overall capacity 500 units per week (the capacity of bottleneck resource Z).
If the company buys Z, capacity of Z becomes 1,050 units per week. But there appears another bottleneck Y with limiting capacity of 600. So overall capacity will be 600 unites per week. So if the company buys Z, additional sales will be only 100 units.If the company buys Z and Y (thus increasing capacity of current bottleneck resource by 550 units), capacity of Z becomes 1,150 units, but there appears new bottleneck X with limiting capacity of 800. The overall capacity will be 800 units, and additional sales with bying new Z and Y will be 300 (current capacity 800 less initial capacity 500).
Hope this helps
Dear mohdgadir, could you please send me a link or e-mail me on lilias_2005@yahoo.com the article about u were asking before, I just could not find it. Will realy appreciate this! Thx in advance!
You can find technical articles on F5 here: https://www.accaglobal.com/en/student/acca-qual-student-journey/qual-resource/acca-qualification/f5/technical-articles.html
2nd article is there “Throughput accounting and the theory of constraints – part 2”
Dear Katerina! Thank you very much for your help. Really appreciate this!
Kind regards, Lilly.
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