Developing an Algorithm For Optimizing Joint Products and Additional Products Mix Decisions Based on Theory of Constraints


EKERGİL V.

ESKISEHIR OSMANGAZI UNIVERSITESI IIBF DERGISI-ESKISEHIR OSMANGAZI UNIVERSITY JOURNAL OF ECONOMICS AND ADMINISTRATIVE SCIENCES, cilt.3, sa.2, ss.85-113, 2008 (ESCI) identifier

Özet

Theory of constrains (TOC) which occurred by the beginning of 80's as a management philosophy, contributed for solving the business failure causes. TOC is used as an important tool for solving the problems of product mix decisions in manufacturing companies. The aim of this study is to develop an algorithm for optimizing joint products, by-products and additional products mix under the TOC. Products produced within this product mix, pass through the common product line or sequential product lines and for this they have different shares from the production costs. For developing the algorithm, it's benefited from the "seven step process" of Tsai, Lai and Chang. The priority of resources and the resources causing bottlenecks because of failure in meeting the demands for products are determined in these steps. The master production schedule performed is based on dominant bottleneck resource in this sequence. The master production schedule consider the facts of the other resources conditions that causes the bottlenecks, reviews them, updates them and with this it aims to reach the proper product mix. Manufacturing companies also benefits from the tools of linear and dynamic programming tools for solving the product mix problem. Although TOC is one these tools, it's used for identifying the bottlenecks and determining the proper mix more easily.