Abstract
The theory of Constraint (Goldratt, The goal: A process of ongoing improvement, 1992) is subordinating the production line input and output material to the line bottleneck/constraint capacity. The line inventory in days (DOI), is optimized by using the TOC rules. The constraint’s daily output, the line’s Drum Beat, defines the amount of raw material which enters the line. Connecting the beginning of the line with a theoretical “rope” to the line’s constraint, with same Drum Beat- the same amount of material, governs the line entrance through the constraint. In order to secure the continuous feeding of the constraint, a buffer, a few days of work in process, is kept a step or two ahead of the constraint.
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Notes
- 1.
DOI Calculation
Quarterly DOI = Inventory/Cost of Goods Sold * 90 (days)
For calculation the annual DOI, 90 days can be replaced by 360 days and the COGs needs to be the total yearly COGs.
Reference
Goldratt, E. M. (1992). The goal: A process of ongoing improvement. Croton-on-Hudson, NY: North River Press.
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© 2016 Springer International Publishing Switzerland
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Issar, G., Navon, L.R. (2016). Drum, Buffer, Rope and Days of Inventory (DOI) Control. In: Operational Excellence. Management for Professionals. Springer, Cham. https://doi.org/10.1007/978-3-319-20699-8_5
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DOI: https://doi.org/10.1007/978-3-319-20699-8_5
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-20698-1
Online ISBN: 978-3-319-20699-8
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