Throughput Accounting (4)

Question 1

How is TPAR improved (increasing)

Answer 1

Increasing the throughput per bottleneck hour

Question 2

How is TPAR improved (reducing)

Answer 2

Reducing the operating cost per bottleneck hour

Question 3

How is TPAR increased (selling)

Answer 3

Increasing the selling price for the product. This increases the throughput per unit

Question 4

How is TPAR increased (material cost)

Answer 4

Reduce material cost per unit. This increases the throughput per unit, therefore increases throughput per unit of bottleneck resource

Question 5

How is TPAR increased (reduce expenditure)

Answer 5

Reduce expenditure on operating costs/factory costs. This reduces the operating cost per unit of bottleneck resource

Question 6

How is TPAR increased (efficiency)

Answer 6

Improve efficiency, and increase the number of units or product that are made in each bottleneck hour

Question 7

Why increase the number of units or product that are made in each bottleneck hour?

Answer 7

As it increases total throughput per hour and operating costs per hour are unaffected

Question 8

How is TPAR increased (elevate)

Answer 8

Elevate the bottleneck so that there are more hours available of the bottleneck resource

Question 9

Consequences of elevating the bottleneck?

Answer 9

Throughput per unit of bottleneck reosurce would be unaffected

Question 10

Since operating costs are all fixed costs and there are more bottleneck hours available, how does this affect operating cost when elevating the bottleneck

Answer 10

The operating cost per bottleneck hour would fall, and TPAR increases