...This paper will focus on the bottleneck process and how the Goldratt’s theory of constraints may be applied to alleviate process bottlenecks. Process Bottleneck The ability to identify the bottleneck is important in the analysis to increase capacity as well as to determine the process capacity. Based on the analysis of the flowchart and metric system, the main bottleneck detected was 120 days invoices remained within the facility with no further updates. Since inpatient admissions originate through the emergency room, patients often times provide incorrect contact information or incoherent at time of admission. Once the task of contacting patients was completed, the next task is easier. Patients with accurate contact information, their cases were settled within 60 days, resulting in revenue for the hospital. Goldratt’s Theory The underlying premise of theory of constraints is that organizations can be measured and controlled by variations on three measures: throughput, operational expense, and inventory (Wikipedia). The Goldratt’s Theory uses a process to eliminate the constraints though five steps which are identifying the constraints, decide the method to exploit the constraint, subordinate all other processes to the above decision, elevate the constraint, and lastly of, as a result of theses steps, the constraints has moved, return to the primary step. Based on this theory to eliminate the constraint, of holding cases for 120 days within the facility, the option of after...
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...THEORY OF CONSTRAINTS Key Term The key term I selected is Theory of Constraints. I selected this term because in my Aviation Maintenance profession this term is getting more visibility as we attempt to implement Continuous Process Improvement (CPI). Explanation of the Key Team Satterlee describes Theory of Constraints as the greater gain will come from identifying which part of the process is a constraint to the whole, rather than focusing on increased output from an entire process (p. 247). In support of the key term, I selected the article, “Theory of constraints: a theory for operations management” (Gupta & Boyd, 2008). Major Article Summary The selected article first investigates linkages between Theory of Constraints and the core concepts/components of operations management and shows how operations management concepts can be integrated with Theory of Constraints (Gupta, & Boyd, 2008). Next, the article proved Theory of Constraints has properties essential for a good theory. Within the article it identifies six steps for implementing the theory of constraints and also describes the five-step thinking process designed to organize the thought process involved in approaching a bottleneck and trying to resolve the problem relating to the constraint (Gupta, & Boyd, 2008). Discussion The Theory of Constraints is an important tool for operations managers to manage bottlenecks and improve process flows. Theory of Constraints views organizations as...
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...Theory of Constraints Term Paper BUSN 6070, Summer 2014 In the day and time in which we live, “quality” has come to encompass much more than just product or process conformance. Quality is a requirement for today’s customer regardless of type of product or the price the consumer has paid. But, when producing a quality product there are some constraints. In management, especially quality management there is something called the Theory of Constraints. The Theory of Constraints is defined as: A management paradigm that views any manageable system as being limited in achieving more of its goals by a very small number of constraints. There is always at least one constraint, and TOC uses a focusing process to identify the constraint and restructure the rest of the organization around it. TOC adopts the common idiom "a chain is no stronger than its weakest link." This means that processes, organizations, etc., are vulnerable because the weakest person or part can always damage or break them or at least adversely affect the outcome. (Garrison, Managerial accounting 14th ed.) Have you ever heard the saying, “You can’t put ten pounds of sand in a five-pound bag?” How about, “I’m trying to juggle too many priorities at once.” If you’ve heard (or said) either of these things, you have some sense of the stress that constraints impose on everyone. In many cases, the challenge appears to be not enough time. But, the characteristics of time are inflexible...
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...Case 7-2 Five Star Tools This report provides an analysis and evaluation of constraints in the production process for the Model C210 and the Model D400 of the Five Star Tools product line. The significant growth the company has experienced in recent years has led to a strain on the firm’s production capacity. This report seeks to determine how to loosen constraints on production and identify the most profitable product line given current production limitations. Incremental analysis is used to determine both the benefit of one additional hour of production time in the coating and sharpening process and the incremental yearly profit associated with adding a new inspection station. Five Star Tools is a small family-owned firm that manufactures diamond coated cutting tools used by jewelers. The production line consists of three major processes: the steel ‘blanks’ are first cut to size and then sent through a chemical bath before the final step in which the prepared tools are diamond-coated and sharpened. The coating and sharpening process requires highly skilled workers, expensive equipment, and utilizes a proprietary process, which simultaneously coats and sharpens the blade of each tool. This stage of production is currently at capacity and causing delays in the completion and delivery of customer orders. Management has identified the final stage of production as the bottleneck, or the binding constraint of production. Delayed orders and eschewed business could be damaging...
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...approach about the firm. Now going through the author’s major theory which has the basic models: The Organizational goal, Expectations and decisions of an organization and Relational concepts. The goal of an organization The authors’ state that individual person has goal, as an organization they do not. However, if the theory is to be well defined, there is need for a goal for the organization, or a corresponding equivalent to that of an individual. The authors adopt a series of independent constraints forced on the organization through negotiation among the bloc members and adjusted over time in response to strains within. For the goal analysis, the authors adopt two organizing devices. The first setoff exhaustive variables influencing the dimensions of the goal while the second set of relational concepts influences the aspiration on a particular goal. The second set is made of past performances, goals of the organization and of others. Though the author state conflicting goals exist in firms, they do not solve the problem given that for maximization problem we can use Lagrange Multiplier or constraints to the objective function directly. Expectations and decisions of an organization According to the authors expectations are the result of inferring from the available information and therefore a good theory should consider the avenue by which information is availed to the firm. Due to the absence of game theory during the writing of this book, the authors examine only...
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...Executive Summary The company’s profits are falling and there is a build up of inventory within the production process. This report considers three management systems which could rectify the situation. Considering Theory of Constraints, Just In Time and Programme Evaluation and Review Technique, the report recommends that more information regarding the cause of the problems is undertaken, and a suitable programme of revaluation of the business processes is undertaken. Introduction The role of management accounting in the organisation has become so much more that the reporting of the score to managers (Hansen, Mouritsen 2006). In the wake of the decline of Western Manufacturing and the relevance crisis of management accounting to modern business as outlined by Kaplan and Johnson in ‘Relevance Lost’, the traditional cost accounting approach has been largely replaced by alternative methodologies (Kee, Schmidt 2000). The role of the management accounting in the modern firm is not only to report the score, but to seek to influence the score by using techniques and theoretical approaches to improve the business processes. As such it is important for managers to understand the use and usefulness of a variety of alternatives to traditional accounting approaches, especially traditional cost accounting and look to introduce other techniques which may have practical advantages for the firm (DUGDALE, JONES 1998). There is no one size fits all approach which will work in any case...
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...Lean Manufacturing Mapping Tools & VALSTAT Introduction • • • • • The 7 Mapping Tools chosen – There are many others How are they associated with the 7 wastes Looking at the origins of the Mapping Tools What is VALSTAT? Looking at Goldratt & Theory Of Constraints – – The Synergies The Theory of Constraints 5 Step Process Introduction - The 7 Tools • The chosen Mapping Tools are centred around the “7 Wastes”. • They are well known tools - 2 new ones • There is not a known methodology to help choose the most appropriate. 1 Introduction – How to tools are related to the 7 Wastes The tools discussed provides an overview on those that are useful for eliminating each of the seven wastes. These tools are necessary for the two following reasons 1) They are completed by the ‘doers’, therefore the only people likely to know what is actually going on 2) When using detailed mapping action plans, you can ensure bottom up support by developing the plans from the wider team. Origins of the Mapping Tools Mapping Tool Process Activity Mapping Supply Chain Response Matrix Production Variety Funnel Quality Filter Mapping Demand Amplification Mapping Decision Point Analysis Physical Structure Mapping Origin of Mapping Tool Industrial Engineering Time compression/ logistics Operations Management New Tool Systems Dynamics Efficient Consumer response/logistics New Tool Process Activity Mapping 2 What is Process Activity Mapping ? • • Has traditionally been used...
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...this branch, we can apply Economics in decision making. Managerial Economics bridges the gap between economic principles/ theory and managerial practice. To take a specific decision, this branch applies micro economic analysis. We can apply the principles of Economics in taking decisions related to some problems like scale of operation, quantum of resources to be employed, marketing etc. Because of the scarcity of the resources it is not possible to have whatever we want. To get the better value from limited resources it is essential to evaluate the difference between the total cost and the total benefits of any activity. To choose the better option one of the tools provided by the managerial economics is marginal analysis. By weighing the marginal benefits against the marginal costs one can take the best decision. Marginal Costs- Marginal cost is the change in total cost when one more unit is produced. Marginal cost occurs when an activity increases by one unit. When the firm increases its production the total cost always increases even though the marginal costs may not rise. Rise in marginal costs is shown in the below chart. Following table shows the total cost and the marginal cost by making pizza: Quantity Total Cost Marginal Cost 0 0 -- 1 5 5 2 10 5 3 17 7 4 25 8 5 34 9 6 44 10 7 58 14 8 73 15 9 90 17 10 110 20 (MARGINAL ANALYSIS) Marginal Benefits- Marginal benefit is change in total benefit when one more unit is produced or when an activity increases...
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...MGT 333 CONSTRAINTS MANAGEMENT PROJECT – BANKING INDUSTRY Detailed description The banking industry in the United States has undergone significant changes, both in processes and services provided, in recent years. The main goal of these for-profit institutions and the changes they have endured is simple – to increase revenue. The backbones of these institutions are the customers. In order for different banks to compete for customers, they must take into considerations the various factors of their business. To insure they provide the best customer service, they most account for cost, flexibility, time, and quality in their services rendered. One service, the focal point of this paper, is the process of mortgage loans. Buying a home can be one of the most exciting experiences in the lives of adults, or it can be one of the most difficult. To ensure that customers are well equipped with the skills and means to take on such a task, banks go through a rigorous mortgage loan application process. This paper will focus on the process used by a bank located in the Midwestern region of the United States. Furthermore, it will provide an analysis of how by implementing the principles of the Theory of Constraints successfully improved the service rendered by the bank, thus providing a greater service to the customer. The mortgage loan process begins with a simple application. Each lender’s application requirements may differ. Generally, the formal application requires details about yourself...
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...Brief The assessment for the Business Economics module is a group portfolio (individual for re-sitting students) consisting of two parts to be submitted mid way through the autumn and spring terms. The portfolio will provide an analysis of the microeconomic and macroeconomic environments that impact on an organisation or sector of the group’s choice. The first part of this portfolio will consist of a group report to be submitted by the end of week 3 of the spring term which identifies the key micro economic constraints that impact on the organisation or sector under consideration. In terms of weighting the first element contributes 50% of the marks for the module. This first element will address some of the key microeconomic aspects affecting the business or sector selected. It will consist of a report that identifies the key features and constraints that impact on the competitive environment under consideration. Specifically, this will address: 1. The extent of competition in the sector/market – e.g. the number of competing firms, the size of these firms and any particular issues that arise from this, such as market dominance, price leadership, scale economies, issues that may arise from regulatory and associated legal constraints, such as patents etc. 2. The theoretical implications arising from the competitive environment and the implications that these have for the way in which the proposed organisation structures and implements its competitive response...
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...founded by Encik Zayed in conducted trading and supplying related product including manpower supplies to oil and gas industries. 2004 - Delima Enterprise incorporated as Delima Enterprise Sdn. Bhd. - 2 principal shareholder and controlling directors : Encik Zayed and Puan Hashimah (Husband and wife) 2006 - Company submitted application for banking facilities and required company’s Audited Financial Statements for the last 2 years. - There are so much mistake happened during the last two years founded by the auditor and Cik Amy (Finance Executive) ANALYSIS : Choose to develop in-house accounting system or outsourcing the system EVIDENCE: In survey 73% of company outsourced some or all of their information system and most outsourced to several companies to increase flexibility, foster competition and reduce cost SOLUTION : Outsourcing (purchase)the integrated system such as SAP software,UBS. ANALYSIS : Choose to implement manual or auto pre number document & record keeping. EVIDENCE: As for big company,SimeDarby Bhd they have a proper documentation with...
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...COURSE: MANAGERIAL ECONOMICS: COH 723 Programme; MSc Health Services planning and Management Department; Community Health Lecturer; J Kwaku Agyemang 1. Course Description Managerial Economics is concerned with resources allocation, decisions that are made by managers in both private and public sections (private business, private NGO’s and public sector) of the economy. The course emphasizes the application of economic principles and methodologies to decision-making process of business firms operating under conditions of risk and uncertainty. Managerial Economics, thus, uses concepts, models and analytical techniques of economics to study and analyse the operations of businesses and the type of problems managers face. Hence it provides important conceptual insights for gaining a better understanding of business environment and for making of quality business decisions with minimal trial and errors. 2. Objectives: 2.1 To provide participants with a much clearer view of the applicability and relevance of economics to decision making within business firms. 2.2 To develop students’ knowledge of applied economics 2.3 To develop students’ analytical skills to a higher level. 2.4 To enhance students’ insight into the operation of business and the nature of problems managers face. 3. Course coverage * Introduction of students to Managerial Economics and the use of models and other analytical concepts in decision making process...
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...Marts, 2011 Line-item budgeting and film production – Exploring some benefits of constraints on creativity and aesthetic value creation Thomas Frandsen, Ivar Friis, and Allan Hansen*) Solbjerg Plads 3 2000 Frederiksberg Copenhagen Business School Denmark *) Corresponding author: ah.om@cbs.dk Early work – Please do not quote without the permission from the authors Paper to be presented at the workshop on Creativity and Control Sponsored by Accounting Organizations and Society 4–5 April 2011, Barcelona, Spain Abstract: This paper explores the role of budgeting in the Danish film industry and seeks to illustrate the positive effects a line-budget might have on the creativity and innovativeness in film production. In our analysis we provide illustrative examples of the enabling and facilitating role of budget constraints on film production from the Danish film industry in general as well as from a case study of the process of making the Danish film “The Island of Lost Souls” in particular. We draw on Elster (2000)’s constraint theory and suggest that the constraints imposed on agents by line-item budgeting under some circumstances lead to situations where ‘less is more’ as line-item budgeting might be used to focus creative behavior as well as pre-commit the agent against passion and time inconsistency. 1 I. Introduction The dysfunctional consequences of constraints imposed by budgets on agents dealing with uncertain, complex or dynamic organizational...
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...Week 1 * For which key organizational functions are tasks and responsibilities identified for all the steps of the generic product development process? marketing, design, manufacturing, other * A service process design flowchart is referred to as a service blueprint to emphasize what? The importance of process design * If an automotive service center has an issue with a car not being clean when returned to a customer, the poka-yoke corrective action might include what? An inspection by the person returning the car before the car is seen by the customer. * Using a project layout for building an aircraft, why would you want to place rivets close to or even in the fuselage? Rivets are used consistently throughout the construction process * Permeable systems are characterized by being penetrable by customers via what two forms of contact? Phone and face-to-face contact * What is a company trying to optimize in the most common approach to developing a workcenter layout? Movement of material * Even though they use different models, both the Ritz-Carlton Hotel Group and Nordstrom Department Stores are known for what? The personal attention they provide their customers * Why is the planning phase often referred to as Phase 0 (Zero) of the generic product development process? This phase happens before the project is approved * Why do many customers like the self-service approach to service design? It puts the customer in control * Some...
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...The aim of every organisation is to provide good quality services and make profit. In other to do this, organisation need the supply chain management pattern in delivering good quality and effective service in each different segments. Firstly supply chain management can be defined as the management of the interconnection of organisation that relate to each other through upstream linkage between the different processes that produce value in the form of product and services to the ultimate consumers.(Slack et al. 2004, p. 445). This essay will basically expanciate the pattern which organisations render services along with the theories. Now we understand that supply chain management is the connection or linkage between the different processes or plan to organise the various stages of proving goods and services in an organisation. To identify the performance used for supply chain management, there are several approaches adopted to deal with this issue in organisation the triple bottom line which consist of the social bottom line, the environmental bottom line, and the economic bottom line (Slack et al. 2013, p. 39). The social bottom line illustrate the usefulness of the relationship between the society and business performance and also businesses should responsible for the impact they have on the society in other to satisfy the society co-operate social responsibility (csr). The environmental bottom line; organisations also taking part in the environmental sustainability by...
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