Theory of Constraints with Excel Solver
The Theory of Constraints is a process improvement methodology that emphasizes the importance of identifying the " system constraint " or bottleneck. By leveraging this constraint, organizations can achieve their financial goals while delivering on-time-in-full to customers, avoiding stock-outs in the supply chain, reducing lead time, etc. Manufacturing Process Example With this simple value stream above, to produce products A and B, we want to illustrate the way to maximize profit taking into account the system constraints . Each product is made by assembling two sub assemblies, one of them common to both products. The process consists of three sequential operations for which there are special purpose workstations with a corresponding operator each trained for the specific job: Manufacturing Test Assembly We want to know how many products A and how many B we should produce to maximize profit. System Constraints Product Margin We want to maximize overall profit so we calcu...