The Application of Theory of Constraints in Manufacturing Outsourcing: A Case Study
Author Name : A. Adnan, A. Cazan, M. Safa, A.W.M Lung, S. Muppala
Abstract: This paper presents an in depth study of problems due to outsourcing of manufacturing operations. Influencing factors are identified and relationship between them is defined. The outsourcing problem is formulated using linear programming (LP) and analytical solution is determined using context of theory of constraints (TOC). The model can facilitate decision makers in deciding which products to manufacture inhouse or which to outsource. The model assists decision makers by computing an operational ratio without solving LP problem. The final outsourcing TOC-LP model is simple in application and requires the calculation of few variables without sacrificing the accuracy.