- 10 Marks
MA – L2 – Q2 – Throughput Accounting
Calculate max output for a soft drinks firm with five processes, limited by machine hours.
Question
The following data refers to a soft drinks manufacturing company that passes its product through five processes and is currently operating at optimal capacity.
| Process | Time per unit (minutes) | Machine hours available |
|---|---|---|
| Washing | 6 | 1,200 |
| Filling | 3 | 700 |
| Capping | 1.5 | 250 |
| Labelling | 2 | 450 |
| Packing | 6 | 1,300 |
Required:
(a) Calculate the maximum output possible in the time available.
(b) Calculate the throughput accounting ratio.
(c) Explain the benefits and limitations of using throughput accounting techniques.
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