The Third Step in Theory of Constraints Application,"subordinate All Other

question 143

Multiple Choice

The third step in Theory of Constraints application,"subordinate all other decisions to Step 2," means that the analyst should:

• A)wait for authorization before proceeding with any system-wide changes.
• B)schedule non-bottleneck processes to support the bottleneck schedule.
• C)seek to increase capacity of only the bottleneck resources.
• D)should seek to increase capacity of both the bottleneck and non-bottleneck resources.

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Definitions:

Conservatism

An accounting principle that mandates recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but only recognizing revenues and assets when they are assured of being received.

Patent Amortization Expense

The gradual expensing of the cost associated with a patent over its useful life, reflecting the consumption of the patent's value.

Infringement

The action of violating a law, agreement, or the rights of another, especially intellectual property rights.

Legal Costs

Expenses incurred due to legal services, which may include lawyer fees, court fees, and other related costs.