Ohio State University
BUSMGT 3230
5.0 Managing Constraints
Constraint:
Any factor that limits the performance of a system and restricts its output. In linear programming, a limitation
that restricts the permissible choices for the decision variables.
1. Physical (usually machine, labor, or workstation capacity or material shortages, but could be space or quality)
2. Mark
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5.0 Managing Constraints
Constraint:
Any factor that limits the performance of a system and restricts its output. In linear programming, a limitation
that restricts the permissible choices for the decision variables.
1. Physical (usually machine, labor, or workstation capacity or material shortages, but could be space or quality)
2. Market (demand is less than capacity)
3. Managerial (policy, metrics, or mind-sets that create constraints that impede work flow).
Bottleneck:
A capacity constraint resource (CCR) whose available capacity limits the organization's ability to meet the
product volume, product mix, or demand fluctuation required by the marketplace.
Theory of Constraints (TOC)
A systematic management approach that focuses on actively managing those constraints that impede a firm's
progress toward its goal.
Five Steps:
1. Identify (WIP, highest utilization>100%, highest processing time)
2. Exploit (maximize throughput of bottleneck)
3. Subordinate (non-bottleneck resources support b
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