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The decision of what amount of a product to produce in a specific interval may impact seriously corporate earnings. Various methods have been used to eradicate this problem. However, the Theory of Constraints scientific-oriented work represents the majority. This theory claims that at least one constraint is present in every system. In a production system the most frequently mentioned constraints are the capacity of machines or workers. In times of crisis, demand becomes one of the constraints especially for metallurgical centred companies. Therefore, the resolution of product mix related problems is crucial in metallurgy. This paper focuses on product mix decision-making with respect to the Theory of Constraints (TOC) and Activity Based Costing (ABC). Much research has been conducted on the application of TOC and the product mix problem using Dr. Goldratt’s recommended solution. However, the latter does not lead to the optimal product mix in specific cases. The ABC emphasizes the causality of costs, activities and the final outcome. The method is based on the principle of processes that consume resources and outcomes that in turn, consume processes. This discussion presents the more developed solutions of the TOC and the ABC approach to this problem. The critical evaluation of the methods is performed and optimal procedure for the metallurgical industry is selected with recommendations for its use.
Keywords: Product mix, Theory of Constraints, Activity Based Costing© This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.