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Academic Year 2018-2019 | Term VI

Advanced Operations Management: Theory of Constraints
Credits: One
Course instructor: Prof. Mahesh Gupta
Email: Phone: 1-502-876 0446
Consultation hours: TBD
Course Introduction:
The Theory of Constraints (TOC) suggests that managers should focus on the few limiting
factors, popularly called constraints, to improve organizational performance. In this course, we
will learn TOC principles and concepts – mindset, measurements, and methodology (3Ms) – for
improving operations continuously and using it to build sustainable competitive advantage.

Course Objectives:
The goal of this course is to significantly enhance managers’ ability to analyze and solve practical
operations management problems encountered in their businesses by applying principles and
concepts of TOC. On the completion of this module, student should be able to:
 Explain the throughput-world thinking paradigm of TOC – TOC measures
(Throughput Inventory and Operating Expenses) and discuss its relationship with
conventional financial measures of net profit, return-on-investment.
 Explain the logistical paradigm of TOC – the Process of Ongoing Improvement (also
known as five focusing steps of TOC)
 Apply and describe 3Ms of TOC in the context of real-world applications and explain
how TOC can be used to integrate business functional areas.
 Explain the relationship of TOC with often seen competing process improvement
philosophies such as Lean and Six Sigma towards the development of an integrative
TLS framework

Class sessions will be primarily discussion-oriented supplemented by lectures. The course introduces the
Theory of Constraints in a logical and easy to digest form. Topics are discussed in simple every day
applications and then applied to harder problems. Students successively gain skills in new areas while at
the same time build on skills presented previously.

Required Course material:
Book: Goldratt and Cox, The Goal (Any Edition will do), 1992, ISBN-10: 0884270610
Articles: (will share Dropbox folder)
1. Gupta, M., Chahal, H., Kaur, G., & Sharma, R. (2010). Improving the weakest link: A
TOC- based framework for small businesses. Total Quality Management, 21(8), 863-883.
2. Kohli, A. S., & Gupta, M. (2010). Improving operations strategy: Application of
TOC principles in a small business. Journal of Business & Economics Research, 8(4), 37.
3. Gupta, M., & Kline, J. (2008). Managing a community mental health
agency: A Theory of Constraints based framework. Total Quality
Management, 19(3), 281-294.

Course prerequisites:
There are no formal prerequisites for this class per se. The students are expected to have taken
core operations management course and have work experience. The class moves very
quickly and students must be self- motivated to grasp the significance of much of the
material presented. Students are also asked to play experiential games in groups (or
individually if needed) and perform significant mental exercises as they resolve long-standing
problems at work, service or manufacturing organizations.

Evaluation scheme:
Assignme Assignments/Exams % Due at the start of session
nts Type
Group The Dice Game 10+ #1
Group The Job Shop Game 10+ #3
Individual The TOC Measures 10+ #4
Individual The Modified PQ Company 10+ #5
Individual Class Contribution 10
Individual Term Exam 30-50%

Attendance requirement:
100% attendance is required for the course. A student not meeting the attendance requirement
will not get credit for the course. Under specified exigent circumstances, the program
committee can waive off attendance up to 25%.
Session-wise course outline:
# Topics covered Assignments Due Pre-class readings
1 What is the theory of TOC? The Dice Game Overall Impression of The Goal
2 The Mindset Revisit chs. 1-15 (pp. 1-118)
3 The Measurements -I The Job Shop Game Revisit chs. 16-24 (pp. 119-200)
4 The Measurements -II
5 The Methodology -I The PQ Company Case Revisit chs. 25- last (pp. 201- )
6 The Methodology -II
7 End-Term Exam. Quantitative and Essay
Additional references:
H. William Dettmer, The Theory of Constraints: A Systems Approach to Continuous
Improvement, ASQ Quality Press, Milwaukee, Wisconsin, 1997.
D. Jacob, S. Bergland, and J. Cox, VELOCITY: Combining Lean, Six Sigma and the Theory of
Constraints to achieve Breakthrough Performance, Free Press, New York, NY 2010

Boyd, L., & Gupta, M. (2004). Constraints management: what is the theory? International
Journal of Operations & Production Management, 24(4), 350-371.
Gupta, M. C., & Boyd, L. H. (2008). Theory of constraints: a theory for operations
management. International Journal of Operations & Production Management, 28(10), 991-1012.
Gupta, M., & Boyd, L. (2011). An Excel-based dice game: an integrative learning activity in
operations management. International Journal of Operations & Production Management, 31(6),
About the instructor:
Dr. Mahesh Gupta has been on the faculty at the University of Louisville for 25+ years and is
currently Professor of Management. Dr. Gupta has M.Com. Degree from India (1982), an MBA
(1986) from the University of Manitoba, Canada and a PhD in Industrial Engineering from the
University of Louisville (1990). He is a member of Production and Operations Management
Society and the Decision Sciences Institute. Dr. Gupta has worked extensively with local
companies via UofL MBA program where students are required to analyze company operations
and suggest ways to improve the processes using TOC approach. He has reported results from
these projects to academic as well as practitioner community through publications. Dr. Gupta has
published extensively in the International Journal of Production Research, International Journal
of Operations and Production Management, Decision Sciences Journal and European Journal of
Operational Research.