Detailed Answer
(a) The requirement is to describe the objectives of the
theory of constraints (TOC). The objective of TOC is to increase
throughput contribution while decreasing investment and
operating costs. Throughput contribution is revenues minus the
direct materials cost of goods sold. Investment is the sum of
materials cost in direct materials; work in process and finished
goods inventories; research and development costs; and the costs
of equipment and buildings. Operating costs include salaries
and wages, rental expense, utilities, and depreciation.