CMA Final · Strategic Cost Management · Throughput Accounting
Under the theory of constraints, after the bottleneck has been fully exploited and subordinated to, what is the next step in the five focusing steps if management wants to raise output further?
The next step is to elevate the constraint by adding capacity, for example more machines or shifts. Only after this raises the bottleneck capacity and the constraint moves does management repeat the process by identifying the new constraint.
- AIdentify a new constraint immediately
- BElevate the constraint by adding capacityCorrect
- CReduce direct material prices on non-bottleneck items
- DIncrease inventory buffers at all non-bottleneck stages
Explanation
The five steps are identify, exploit, subordinate, elevate, and repeat. After exploiting and subordinating, the constraint is elevated by adding capacity such as another machine or shift. A new constraint is identified only after elevation shifts the bottleneck.
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