Search: pricing

Theory of Constraints (TOC) Pricing Quoting Estimating

May 7, 2011

Theory of Constraints (TOC) Pricing Quoting Estimating Project We usually do pricing projects as part of larger results based consulting engagements, but because they have been so successful (typically 10 to 20+% return on Throughput), we have decided to offer stand alone pricing projects. This program is targeted at custom manufacturers, job shops and machine shops […]

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Pricing using Theory of Constraints – Q&A

August 1, 2007

I have not yet finished Blue Ocean Strategy. I will explain why when I post my review. I have, however, received a pricing question and have written an answer. Enjoy. Q: What about companies that have a market constraint and use S-DBR? A: For companies that have a market constraint, I still recommend that they […]

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Pricing Using Theory of Constraints Part 6 of 6

June 6, 2007

This is the final installment on Theory of Constraints pricing. At least for now. Goldratt’s Theory of Constraints, The Goal, and Throughput Accounting don’t address pricing specifially. So, I tried to summarize what we do with our clients. This pricing exercise has resulted in 10 to 20% increase in profits for our clients, so I […]

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Pricing using Theory of Constraints Part 5

May 18, 2007

For the products that are well above the T/CU you need to look into the following things: – what is your close rate on these items, is it low? – have your customers/prospects told you that you were over priced? – do you want more of this type of business? The products that are slightly […]

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Pricing using Theory of Constraints Part 4

May 13, 2007

Let’s look at the products that are currently priced below the mininum T/CU that you calculated. You can have some products priced below your min T/CU because the weighted average just needs to be at the minimum. To determine if this is one that should be below the minimum or raised you need to take […]

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Pricing using Theory of Constraints Part 3

May 11, 2007

Compare the minimum T/CU to the T/CU for each product. You will find current prices that are too low and too high relative to the min T/CU. Now look at your quotes and calculate the T/CU for all your quotes. What is the T/CU for the ones your winning versus the ones your losing? …to […]

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Pricing using Theory of Constraints Part 2

May 10, 2007

Now that we have our current T/CU for each product/service we calculate the minimum T/CU we need to cover all of our Operating Expenses plus make the profit we want. Here’s how we do that: Min T/CU = (annual OE + annual profit) divided by annual available constraint units Operating Expenses (OE) are all the […]

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Pricing using Theory of Constraints PART 1

May 8, 2007

Deciding on pricing for your products or services tends to consume a lot of time and can even be stressful. Typically we are looking for a price that 1) will help us to achieve our financial goals; 2) meet or exceed the value perceived by the market place (will customers buy at that price?); and […]

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#Vistage Maximizing Profitability the Theory of Constraints Way

November 12, 2014

I have given my 3 hour Maximizing Profitability the Theory of Constraints (TOC) Way over 200 times. I’ve shortened it to an hour for various keynotes and I’ve delivered to more Vistage groups than I can remember. Last year one Vistage group asked me to turn it into a 2 day intensive how to workshop. […]

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TOC Interests

August 4, 2014

Contact Information First Name * Last Name * TitlePlease select a titleMr. Mrs. Dr. Ms. Company Job Title Website Email * Street Address 1 Street Address 2 City State Postal Code Zip Four Country Phone 1 Phone 2 Fax 1 Challenges Industry *Please select an industryManufacturing Project Mgmt and Engineering Consulting Other Professional Services Academia/Education […]

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