Browsing by Subject "Theory of constraints"

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    The integration of the Theory of Constraints and the time-driven activity-based costing system for the improvement of production processes in an SME
    (Universidad de Murcia, Servicio de Publicaciones, 2023) Kefe, Irem; Naci Tanis, Veyis
    In this study, the Time-Driven Activity-Based Costing System (TDABC) is discussed with the Theory of Constraints (TOC). The integration of TDABC and TOC has enabled the determination of the bottleneck activities by the examination of the entire production capacity. For this purpose, a case study was carried out in a manufacturing company. In line with the aim of the case study, the capacity usage based on the TDABC system and capacity constraints were determined within the framework of the TOC. As a result of this study, the following findings were obtained: The activities in the production process of the company were divided into 10 resource centers. Capacity constraints were determined in two of them and it was determined that the order received in the period subject to the study could not meet the production. It was also understood that the degree of products’ utilization of operating activities changed due to the differences in the production processes and that the product with a more complex production process required more capacity utilization. This creates a resource constraint for some activities. Then the solutions based on the five-stage improvement of the theory of constraints were proposed to reduce the identified capacity constraints. The solutions were proposed considering the short and long term. The decision of the product mix that would provide the highest profitability in the short term was made by linear programming and products to be discontinued were decided. Overwork or recruitment of additional staff was proposed to increase the capacity in the long run. The results of the study support the managerial decisions in terms of capacity management, product mix decisions, and improvement of production processes by using the time equations of TDABC. Based on the results of this study, businesses that manufacture products that go through different production processes can benefit from the determination of the utilization degree of the products, the idle and bottleneck capacity, and solutions for their improvement.