MGSC 395 Lecture Notes - Lecture 6: Product Type, Croatian Radiotelevision, Extrusion
12 Oct 2017
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Document Summary
Inventory: the rate at which the system uses money for things it intends to sell. Throughput: the rate at which money is generated by sales. Operating expense: all the money the system uses to turn inventory into throughput. If you break the bottleneck, go back to 1 and start again. Constraint: factor that limits the output of a process/system. Theory of constraints: systematic management approach focusing on maximizing profit by managing constraints. Linear programming: a method to allocate scarce resources among competing demands. Objective function: a math expression explaining what we are trying to optimize. Decision variables: things we can control and for which we are trying to find the optimal value. Constraints: hard limits that impact our ability to choose something about our decision variables. Resource product type 1 product type 2 availability of resource. Contribution to profit: type 1: , type 2:.
