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Sorry to ask this again but i was confused before. This relates to key factor analysis.
When material is limited = we measure how much throughput return we lose on each kilo because we have shortage of material kgs available and we cannot make all the units of that product. So we need to calculate throughput return per kilo in $.
When labour is limited = we measure how much throughput return we lose on each hour because we have shortage of labour hours available and we cannot make all the units of that product. So we need to calculate throughput return per hour in $.
LIKE THIS:
Products = A / B
Throughput return = $10,000 / $12,000
Material kilos = 2000 kg / 3000 kg
Throughput return per kilo = $5 / $4
Ranking = 1st / 2ndIs that correct?
What you have written does not make sense.
You state that your question relates to key factor analysis, but with key factor analysis we do not calculate throughput returns (and as I have replied to you before, in throughput accounting we calculate the return per factory hour – not per kg of materials).
In key factor analysis we are not looking at how much we lose, but choosing whatever gains us more!
I asked before, but you have not replied – which exams are you actually studying for? You are asking questions relating to Papers MA, FA, and PM, – are you taking all three exams this session? 🙂
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