TOC-based decision for best product mix

Theory of Constraints (TOC) provides a framework to identify, exploit, set pace and elevate* the constraint, or put in simpler words: identify the bottleneck in the process and make the best with it.

*Identify, exploit, subordinate, elevate and prevent inertia are known as the “five focusing steps” of Theory of Constraints.

In this constraint or bottleneck-centered approach, the aim is to give this peculiar resource a privileged treatment as it controls directly the whole system Throughput, hence the profit.

But working on the constraint capacity is not enough to maximize Throughput, the product mix is also very important.

Theory of Constraints therefore developed Throughput Accounting in order to cope with issues when making decisions based on traditional accounting and a new way to make decisions regarding product mix.

This video is a 49mn course about TOC-based decision for best product mix by Prof G. Srinivasan, IIT Madras


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One thought on “TOC-based decision for best product mix

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