2011 TOC tutorial student

2011 TOC tutorial student - THE UNIVERSITY OF NEW SOUTH...

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1 THE UNIVERSITY OF NEW SOUTH WALES SCHOOL OF ACCOUNTING ACCT2522 Management Accounting 1 Session 1, 2011 Tutorial 10 – Managing time: the Theory of Constraints Overall Theme This week we focus on the third of the customer value parameters – time. We explore how time can be managed to create and/or sustain value creation and be a source of competitive advantage for the firm. In particular, we examine and apply the Theory of Constraints (TOC). TOC is a relatively new management philosophy that focuses on the management of constraints in order to improve organizational performance. The application of TOC will assist in the effective management of time and costs, and allow for-profit organizations to achieve their goal of making money. Desired Learning Outcomes and Essential Reading BDMM Chapter 5 Non-essential reading: o Mowen et al. Pp. 741-2, and 755-61 o An interesting article on how TOC has been applied in practice can be found here: http://www.highbeam.com/doc/1G1-106648326.html After completing this topic, you should be able to: 1. Understand the concept of “time-based management” 2. Understand the use of Theory of Constraints as a performance measurement system and its critique of conventional measures 3. Appreciate the technical design aspects of TOC, including the identification of constraints and product mix decisions 4. Appreciate how constraining resources and process variability might be managed 5. Understand the issues surrounding the use of TOC principles in practice Self-study Questions Self-study Question 1: BDMM 5.19 Self-study Question 2: BDMM 5.15, 5.16 Self-study Question 3 adapted from ACCT2522 2003 final exam* (PTO) * Note: While largely on TOC, this question incorporates material that will be covered later in ACCT2522.
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2 Angelica Ltd specialises in the production of high tech fancy dress accessories. It has four manufacturing departments and 1 sales department. All employees have part of their income based on their particular department performance. Manufacturing is overseen by production manager Theresa O’Connell, who is in charge of production schedules. Sales are overseen by sales manager Mun Egrub. Angelica Ltd has 2 products: mechanical wings and fairy godfather magic wands: Wings are made up of components A and B, and $5 of extra materials. They are sold for $90 each. Weekly demand is estimated to be 80 units. Wands require components B and C, and $10 of extra materials. They are sold for $100 each. Weekly demand is estimated to be 100 units. Components A, B and C require manufacturing work and direct materials:
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This note was uploaded on 07/13/2011 for the course ACCT 2522 at University of New South Wales.

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2011 TOC tutorial student - THE UNIVERSITY OF NEW SOUTH...

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