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These questions relate to The Goal^1. Answer each these questions in one or two sentences and make a page reference to The Goal. In some cases you can just respond with the key term. You will find a few of the questions on the first exam related to the questions on this page. You can work in groups to do this. An answer key will be provided before the first exam. This is not an assignment but you will see some of this material on the first exam.
The first part of the assignment is called a Q&A assignment where you get to focus on important points with the questions and give a short, to-the-point answer. DO THESE AFTER OR AS YOU READ THE BOOK
General Questions
- What prevents an organization from achieving the goal?
- What is a constraint?
- Why does the book condemn placing emphasis on the efficiency of non-constraints?
- What is throughput? Provide the example from The Goal.
- The book argues that traditional accounting mixes controllable and uncontrollable costs in cost of goods sold. What does he mean by this?
- What is a balanced plant?
- What is the match-stick bowl experiment designed to show?
- What is meant by balancing the flow?
- What is The Goal’s prescription for increasing throughput?
- Why are the topics in The Goal opposed to compromise?
(^1) You do not need to read the interviews at the end of some editions of the book.
Chapter-by-Chapter Questions
These are questions to answer as you read The Goal chapter-by-chapter. Fill-in the blanks where indicated. For some chapters it is just a comment on what happened in the chapter.
Chapter 1. The first chapter gets the reader acquainted with Mr. Alex Rogo and his apparent problems with his production plant. This is shown through a confrontation between Mr. Rogo and his boss Mr. ________, the Division Vice President. The dispute is over an overdue order #__________. Alex has _______ months to show an improvement or the plant will be shut down!
Chapter 2. You experience Mr. Rogo’s background through his reflections back on his travels to eventually find himself back where he started. "He’s now ____ years old and a ________ plant manager".
Chapter 3. Mr. Peach calls a meeting at headquarters for all plant managers and his staff. Through the grapevine Alex finds out perhaps why Mr. Peach has been acting so erratic lately, the Division has ______ year to improve or it’s going to be ___________.
Chapter 4. While at this meeting, Alex thinks back on a recent business trip where he ran into an old _________ professor by the name of ___________, at ____________. He puzzles Alex with how well he knows how Alex’s plant is doing while he has no knowledge of where Alex is employed. He also predicts the problems of high inventories and not meeting shipping dates. He also states that there is only one goal for all companies, and anything that brings you closer to achieving it is productive and all other things are not productive
Chapter 5. Alex decides to leave the meeting at the break. He has no particular place he would like to go; he just knows this meeting isn’t for him, not today. He needs to understand what the "goal" is. After a ____________ and a six pack ______________ it hits him. The "goal" is to make __________ and anything that brings us closer to it is productive and anything that doesn’t isn’t.
Chapter 6. Mr. Rogo sits down with his ______________________ by the name of Lou, and together they define what is needed in terms of achieving the goal. Net profit needs to increase along with simultaneously increasing return on investment and cash flow. Now all that is needed is to put his specific operations in those terms.
Chapter 7. Alex makes the decision to stay with the company for the last three months and try to make a change. Then he decides he needs to find Jonah.
Chapter 8. Alex finally speaks to Jonah. He is given three terms that will help him run his plant, ______________, _________________, and _________________ expense. Jonah states that everything in the plant can be classified under these three terms. "______________ is the rate at which the system generates money through sales." "_______________ is all the money that the system has invested in purchasing things which it intends to sell." "______________ expense is all the money the system spends in order to turn ___________ into______________." Alex needs more explanation.
Chapter 9. Alex fresh off his talk with Jonah gets word that the head of the company wants to come down for a photo opportunity with one of Alex’s ______________. This gets Alex thinking of the efficiency of these ________________. With the help of the accountant, inventory control woman, and the production manager, Alex discovers the______________ increased costs, operational expenses, and therefore were less
Chapter 18. In this chapter Jonah introduces Alex to the concept of ______________________ and non- ________________. Jonah defines these terms as follows. "A ___________________ is any resource whose capacity is equal to or less than the demand placed upon it. "A ____________________ is any resource whose capacity is greater than the demand placed on it." Jonah explains that Alex should not try to balance capacity with_______________, but instead balance the flow of ____________________________.
Later, Alex and his team recognize the___________________, the areas where capacity doesn’t equal demand, like the slow kid Herbie on the hike. With this discovery goes the ideas related to reorganizing the plant like Alex did with the hike. Production is a process and it cannot be moved around so easily. Many processes rely on the previous one to be able to complete the next. Alex would need more machines, which takes more capital, and division is not going to go for that.
Chapter 19. Well, Jonah makes a visit to the plant. Jonah tells Alex that a plant without bottlenecks would have enormous excess capacity. Every plant should have __________________. Alex is confused. What is needed is to increase the capacity of the plant? The answer is more capacity at the __________________. More machines to do the bottleneck operations might help, but how about making them run more effectively. Jonah tells them that they have hidden capacity because some of their thinking is incorrect. Some ways to increase capacity at the bottlenecks are not to have any down time within the bottlenecks, make sure they are only working on quality products so not to waste time, and relieve the workload by farming some work out to vendors.
Jonah wants to know how much it cost when the bottlenecks (X and heat treat) machines are down. Lou says $32 per hour for the X machine and $21 per hour for heat treat. How much when the whole plant is down? Around $1.6 million. How many hours are available per month? About 585. After a calculation, Jonah explains that when the bottlenecks are down for an hour, the true cost is around $2,735, the cost of the entire system. Every minute of downtime at a bottleneck translates into thousands of dollars of loss throughput, because without the parts from the bottleneck, you can’t sell the product. Therefore, you cannot generate _______________________.
Chapter 20. Alex organizes the bottlenecks to work on only ___________ orders from the most _ to the least _______________. He then finds his wife. She is at ____________________. Through their conversation it is learned that she still needs to be away from everybody, even the kids.
Chapter 21. The crew works out some of the details for keeping the bottlenecks constantly busy. In the process they find that they need another system to inform the workers what materials have priority at non- bottlenecks. ____________ and ______________ tags are the answer. ___________ for bottleneck parts to be worked on first as to not hold up the bottleneck machine, and _______________ for the non-bottleneck parts. That concludes another week. The true test will be next week.
Chapter 22. Great, ______________orders were shipped. Alex is pleased, but he definitely needs more. He puts his production manager on it. His production manager rounds up some old machines to complement what one of the bottlenecks does. Things are looking up.
Chapter 23. They are becoming more and more efficient, but lag time arouse with the two bottlenecks because of workers being loaned out to other areas and not being at the bottlenecks when needed to process another order. It seems there was nothing to do while waiting for the bottleneck machine to finish the batch. Therefore, in keeping with the notion that everybody needs to stay busy, workers were at other areas between
batches. Alex decides to dedicate a foreman at each location all the time. Then one of those dedicated foreman, the night foreman, discovers a way to process more parts by mixing and matching orders by priority, increasing efficiency by ____________ percent. Finally, one process being sent through a bottleneck could be accomplished through another older way and therefore free up time on the bottleneck. Do you see any classical management in how they were operating the plant in the past? ___________________________________________________________ How about management sciences approach to how they are running the plant now? _________________________________________
Chapter 24. Now that the new priority system is in place for all parts going through the bottlenecks, inventory is decreasing. That’s a good thing right? But lower inventory revealed more _________________. This intrigues Jonah so he’s coming to take a look.
Chapter 25. "There aren’t any ___________________", says Jonah. What actually has happened is a result of some old thinking. Working non-bottlenecks to maximum capacity on bottleneck parts has caused the problem. All parts are stacked up in front of the bottlenecks and others are awaiting non-bottleneck parts for final assembly. There needs to be balance. The red and green tags need to be modified. It seems as if the bottlenecks will again control the flow, by only sending them exactly what they need and_________ they need it.
Chapter 26. Ralf, the computer wiz, says he can come up with a schedule for bottleneck parts and when they should be released. This will alleviate any excess ______________ of the bottlenecks, but what about the non-bottlenecks? Jonah says with the same data out of the bottlenecks to final assembly, you should be able to predict non-bottleneck parts as well. This will make some time, but there are enough parts in front of the bottlenecks to stay busy for a month. This is now starting to look like a management science management approach.
Chapter 27. There is another corporate meeting. Mr. Peach doesn’t praise Alex like Alex thinks he should. Alex decides to talk with him in private. Mr. Peach agrees to keep the plant open if Alex gives him a _____________ percent improvement next month. That will be hard because that relies heavily on demand from the marketplace.
Chapter 28. Just then Jonah called to let Alex know that he will not be available to speak with in the next few weeks. Alex informs him of the new problem of more inventories and less throughput. Jonah suggests reducing batch sizes by half. Of course, this will take some doing with vendors, but if it can be done, nearly all costs are cut in half. Also, they get quicker response times and less lead times for orders. Sounds good.
Chapter 29. Alex is propositioned with a test. They can greatly increase sales, current and future, if they can ship a _________________products in _____________ weeks. Impossible without committing the plant to nothing but the new order? Wrong! How about __________________ sizes. Cut them in half again. Then promise to ship 250 each week for four weeks starting in two weeks. The customer loved it.
Chapter 30. _____ percent!! That’s great, but it’s not derived from the old cost accounting model. The auditors sent down to the plant from Division find just ___________% improvement. Most of it accounts from the new order. Which by the way, the owner of the company that placed the order came down personally to shake everybody’s hand in the plant and to give a contract to them for not a thousand parts but ________ thousand.
