Advanced Techniques of Theory of Constraints and Activity Based Costing for Scheduling of High Technology Production Lines

One of the most important decisions that a manager should make is to determine a product mix to be scheduled able to maximise profits. To make right decisions he needs more accurate information about the optimal product mix and the restrictive bottlenecks of its company. The objective of this paper is to demonstrate as using the Activity Based Costing (ABC) approach together with the Theory of Constraints (TOC) philosophy we are able to locate an optimal solution to the product mix problem and the bottlenecks machines on the shop floor. A case study is provided to show the applicability of the proposed approach to a real case. Specifically we have analysed an aeronautical firm where, applying our methodology we have located a new layout able to reduce the total cost per unit during the mortgage time.