by Dr Lisa | competitive pricing, determining prices, Dr Lisa Lang, eliyahu m goldratt, goldratt, pricing, selling prices, strategic pricing, T/CU, the goal, throughput accounting, throughput per constraint unit
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... by Dr Lisa | competitive pricing, determining prices, Dr Lisa, Dr Lisa Lang, eliyahu m goldratt, goldratt, pricing, selling prices, strategic pricing, T/CU, throughput accounting, throughput per constraint unit
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... by Dr Lisa | competitive pricing, determining prices, Dr Lisa, Dr Lisa Lang, eliyahu m goldratt, goldratt, pricing, selling prices, strategic pricing, T/CU, throughput accounting, throughput per constraint unit
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... by Dr Lisa | competitive pricing, determining prices, Dr Lisa Lang, eliyahu m goldratt, goldratt, pricing, selling prices, strategic pricing, T/CU, throughput accounting, throughput per constraint unit
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... by Dr Lisa | competitive pricing, determining prices, Dr Lisa Lang, goldratt, pricing, selling prices, strategic pricing, T/CU, theory of constraints, throughput accounting, throughput per constraint unit
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... by Dr Lisa | competitive pricing, determining prices, Dr Lisa Lang, goldratt, strategic pricing, theory of constraints, throughput per constraint unit
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...
