1. In the theory of constraints, throughput refers to
    a. sales dollars less direct materials and direct labor costs.
    b. sales dollars less direct materials costs.
    c. sales dollars less variable cost of goods sold.
    d. the cost of total production output.
    e. the cost of good production output.

2. In the theory of constraints, the pace of a non-bottleneck production operation is controlled by the pace of
    a. the previous (upstream) operation.
    b. the next (downstream) operation.
    c. a bottleneck operation.
    d. another non bottleneck operation.
    e. the team leader.

3. One of the key ideas in Goldratt's theory of constraints is to maximize throughput by
    a. balancing the production line, i.e., equal capacity at each operation.
    b. balancing the flow of work in the plant.
    c. maximizing production at each operation.
    d. a and b.
    e. all of these.

4. An objective in the theory of constraints is to 
    a. balance the capacity of each operation in the plant so that all operations will produce at the same pace.
    b. balance the flow of work by allowing the most binding constraint to set the pace for the plant.
    c. balance the capacity of each operation by recognizing the variability within the system.
    d. balance the flow of work by allowing each operation to produce at it’s own pace.
    e. none of the above.

5. The drum in a theory of constraints system
    a. enforces the pace.
    b. authorizes production.
    c. protects the pace.
    d. sets the pace.
    e. none of these.

6. The rope in a theory of constraints system
    a. enforces the pace.
    b. authorizes production.
    c. protects the pace.
    d. sets the pace.
    e. none of these.

7. The buffer in a theory of constraints system
    a. enforces the pace.
    b. authorizes production.
    c. protects the pace.
    d. sets the pace.
    e. none of these.

8. In a theory of constraints system, throughput is
    a. the money flowing into the system.
    b. the money flowing out of the system.
    c. the money in the system.
    d. sales dollars.
    e. none of these.

9. In the theory of constraints, throughput is
    a. sales dollars less direct materials related to the units sold.
    b. money flowing into the system.
    c. all the money in the system.
    d. a. and b.
    e. a. and c.

10. In the theory of constraints, a constraint is
    a. a policy that limits throughput.
    b. an activity or operation that limits throughput.
    c. a scarce resource that limits throughput.
    d. a. and b.
    e. a., b. and c.

11. A bottleneck is where
    a. the demand on a resource is greater than the capacity of the resource.
    b. the demand on a resource is equal to the capacity of the resource.
    c. buffer inventory should be avoided.
    d. a. and b.
    e. a., b. and c.

12. In the theory of constraints, inventory includes
    a. direct materials.
    b. assets.
    c. all the money in the system.
    d. b. and c.
    e. a., b. and c.

13. When comparing the return of investment calculations in throughput accounting and GAAP accounting, which of the following will be different when the amount of inventory changes?
    a. Net income.
    b. The capital turnover ratio.
    c. The margin, or return on sales.
    d. a. and c.
    e. a., b. and c.

14. According to Goldratt, floating bottlenecks are created by
    a. dependent events.
    b. statistical fluctuations.
    c. attempts to balance the plant.
    d. the combination of a., b. and c.
    e. none of the above.

15. According to the theory of constraints, a non-constraint is utilized when
    a. it is producing at capacity.
    b. when it is activated.
    c. when it is producing throughput.
    d. a. and b.
    e. a. and c.

16. In the theory of constraints, balancing the flow of work requires
    a. breaking the constraint.
    b. working at the pace set by the constraint.
    c. balancing the plant.
    d. a. and b.
    e. a., b. and c.

17. Using Goldratt’s "evaporating cloud" technique refers to
    a. identifying a faulty assumption in a conflict or issue.
    b. breaking the constraint in a system.
    c. identifying the constraint in a system.
    d. compromise.
    e. none of the above.

18. Goldratt is opposed to
    a. product costing.
    b. financial measurements.
    c. cost variances.
    d. a. and c.
    e. a., b. and c.

19. In the theory of constraints, the goal is
    a. to maximize throughput.
    b. to balance the flow of work.
    c. to make money now and in the future.
    d. to minimize inventory and operating expense.
    e. none of the above.

20. Throughput is
    a. money generated by the company.
    b. Sales.
    c. Sales - operating expense.
    d. Sales - inventory.
    e. None of these.

21. In TOC, operating expense excludes
    a. direct labor cost.
    b. direct material cost.
    c. variable factory overhead cost.
    d. fixed factory overhead cost.
    e. selling and administrative cost.

22. In the theory of constraints, inventory is defined as
    a. direct materials included in the products sold.
    b. total assets.
    c. assets - liabilities.
    d. sales - throughput.
    e. none of the above.

23. In the theory of constraints, decreasing inventory (as defined in TOC) without affecting throughput or operating expense, would automatically
    a. increase net income.
    b. decrease net income.
    c. increase return on investment.
    d. decrease return on investment.
    e. produce none of the above.

24. According to Goldratt, floating bottlenecks are caused by the combination of
    a. an unbalanced plant, constraints and dependent events.
    b. a balanced plant, constraints and statistical fluctuations.
    c. an unbalanced plant and statistical fluctuations.
    d. a balanced plant, dependent events and statistical fluctuations.
    e. an unbalanced plant, dependent events and statistical fluctuations.

25. In the theory of constraints, a non-bottleneck operation producing at it’s own pace would
    a. always be activated and always be utilized.
    b. always be activated, but not always utilized.
    c. always be utilized, but not always activated.
    d. always be producing throughput.
    e. none of the above.

26. In the drum-buffer-rope method, material inventory buffers are placed
    a. in the warehouse.
    b. directly downstream from the drum.
    c. directly upstream from the rope.
    d. directly upstream from the drum.
    e. directly downstream from the rope.

27. According to the theory of constraints, which of the following is, or are, global measurements
    a. traditional product costs.
    b. activity based product costs.
    c. throughput.
    d. all of the above.
    e. none of the above.

28. In the theory of constraints, the goal is
    a. to maximize throughput. 
    b. to balance the flow of work. 
    c. to exploit the constraints.
    d. to minimize inventory and operating expense. 
    e. none of the above.

29. ROI in the theory of constraints is
    a. money generated by the company divided by inventory. 
    b. (Sales - COGS)/Inventory.
    c. (Sales - operating expense)/Inventory. 
    d. (Throughput - operating expense)/Inventory.
    e. None of these.

30. In TOC, operating expense excludes
    a. direct labor cost. 
    b. variable factory overhead cost. 
    c. fixed factory overhead cost.
    d. selling and administrative cost. 
    e. None of these.

31. In the theory of constraints, product inventory (i.e., inventory in traditional accounting) includes
    a. direct materials.
    b. direct product costs.
    c. assets.
    d. sales - throughput. 
    e. none of the above.

32. In the theory of constraints, which of the following represent assets?
    a. direct materials. 
    b. direct labor 
    c. factory overhead 
    d. selling costs 
    e. a, b and c.

33. In the theory of constraints, increasing inventory (as defined in TOC) without affecting throughput or operating expense, would automatically
    a. increase net income. 
    b. decrease net income. 
    c. increase return on investment.
    d. decrease return on investment.
    e. produce none of the above.

34. When finished goods inventory increases, (i.e., where the number of products sold is less than the number of products produced) net income based on throughput costing
    a. will be greater than net income based on either absorption costing or direct costing.
    b. will be less than net income based on either absorption costing or direct costing.
    c. will be greater than net income based on absorption costing, but equal to direct costing net income.
    d. will be greater than net income based on direct costing, but equal to absorption costing net income.
    e. none of the above.

35. According to the theory of constraints, which of the following is not, or are not global measurements?
    a. traditional product costs. 
    b. activity based product costs. 
    c. throughput.
    d. a and b. 
    e. b and c.

36.  The dice game or match bowl experiment was designed to show that
    a. workers tend to control their own performance.
    b. special or assignable causes account for most of the variation in performance.
    c. common or random causes account for most of the variation in performance.
    d. a balanced plant is not obtainable. 
    e. a and c.

37. Goldratt’s main criticism of the "cost mentality" is that
    a. product costs are too distorted, too aggregated and provided too late for management’s needs.
    b. thinking in terms of costs motivates managers to optimize the parts of a system rather than the whole.
    c. product costs are generated from accounting systems that represent the main barrier to improvement.
    d. there is no such thing as product costs.
    e. product costs are not needed for pricing products and services.

38. A technique associated with the theory of constraints is referred to as the drum-buffer-rope method. In this method the most binding constraint is the
    a. buffer 
    b. rope 
    c. drum 
    d. a and c 
    e. none of these.

39. Which term (or terms) below is (are) associated with floating bottlenecks?
    a. dependent events 
    b. independent events. 
    c. statistical fluctuations 
    d. b and c. 
    e. a and c.

40. Which of the following concepts or philosophies tend to promote more product diversity?
    a. TOC 
    b. ABC 
    c. JIT 
    d. a and b 
    e. a and c.