An algorithm for optimizing joint products decision based on the Theory of Constraints

A particular decision-making process that is needed by most firms who produce joint products is the one requiring an assessment of desirability of further processing joint products beyond the split-off point. The purpose of this paper is to develop an algorithm for optimizing a joint products further processing decision under the theory of constraints. To fit the jointly produced characteristic of joint products and the sequential produced characteristic between each joint product and its further processing product, the algorithm is composed of seven steps. These steps consider every bottleneck resource to the decision-making process by computing a priority ratio to establish its priority sequence. According to the priority sequence of the most constrained resource, the initial master production schedule is developed. Then, the following steps find the best path to reach the optimal solution under the guidance of all bottleneck resources. Due to its accessibility and comprehensibility, the TOC-based algorithm developed by this paper is a practical tool for obtaining the optimal joint products further processing decision.