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SECTION A This section consists of THREE (3) compulsory questions. Candidates should attempt ALL parts of ALL questions. Marks as indicated for each question. A.1
SECTION A This section consists of THREE (3) compulsory questions. Candidates should attempt ALL parts of ALL questions. Marks as indicated for each question. A.1 Padowan Ltd makes four products using four manufacturing machines. The timing for each unit of production of these machines, and their total actual capacity for next month, is as follows: Product MACHINES Machine 1 (Minutes) Machine 2 (Minutes) Machine 3 (Minutes) Machine 4 (Minutes) A B D Capacity 2 3 3 5 6,000 5 5 3 3 5,900 4 3 3 2 5,000 3 2 2 3 4,000 The unit revenue and cost figures are: PRODUCT Sales () Material () A B D 250 300 270 265 64 72 48 58 Direct Labour () Overheads () 55 80 60 88 76 90 84 95 It is estimated that 200 units of A, 500 units of B, 600 units of C and 300 units of D will be sold during the month. Required: c) Identify the bottle neck machine. [2 marks] d) Calculate the throughput per product and total profit. [2 marks] e) Calculate the throughput per minute for each product and cost per factory minute. [6 marks] CONTINUED f) Calculate the throughput accounting ratio per product and comment on the results. [3 marks] g) Calculate and comment on the weighted average throughput accounting ratio. [2 marks] h) Evaluate the effect, on all the throughput accounting ratios, of a transfer of all product A's output from machine 2 to machine 4, assuming that machine 4's times apply. [7 marks] i) Briefly suggest an alternative strategy than (f) above. Do not do any calculations. [2 marks] j) Clearly state the assumptions underpinning your analysis. [2 marks] k) Discuss the rationale behind the theory of constraints and the steps involved in its application. [8 marks] 1) Discuss the benefits, with the use of two examples, of applying the theory of constraints to an organisation. [6 marks] [Total 40 marks]
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