disposal. Productivity is measured as a ratio of dollars expended to dollars
shipped, i.e., operating expense to throughput. Therefore, if manufacturing
becomes more effective (as defined above), it will produce more revenue for
less expense, resulting in additional net profit.
Constraint Utilization
Constraint utilization (Figure 7.2.6) is measured to quantify the potential
throughput lost by idle time. The constraint is being used only when it is
producing product. This is a local measurement with global ramifications.
Because the constraint is determining the rate at which you generate money,
additional utilization will generate additional revenue (assuming it produces
product for sale, not inventory).
Constraint Rework Hours
Constraint rework (Figure 7.2.7) represents lost throughput. Therefore,
hours spent reworking are multiplied times the dollars of throughput produced
per hour. In this way, the impact of lost constraint hours can be
accurately reported.
disposal. Productivity is measured as a ratio of dollars expended to dollarsshipped, i.e., operating expense to throughput. Therefore, if manufacturingbecomes more effective (as defined above), it will produce more revenue forless expense, resulting in additional net profit.Constraint UtilizationConstraint utilization (Figure 7.2.6) is measured to quantify the potentialthroughput lost by idle time. The constraint is being used only when it isproducing product. This is a local measurement with global ramifications.Because the constraint is determining the rate at which you generate money,additional utilization will generate additional revenue (assuming it producesproduct for sale, not inventory).Constraint Rework HoursConstraint rework (Figure 7.2.7) represents lost throughput. Therefore,hours spent reworking are multiplied times the dollars of throughput producedper hour. In this way, the impact of lost constraint hours can beaccurately reported.
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