by Dr Lisa | Theory of Constraints for Strategy
I spent a week with Dr Eliyahu Goldratt. As many of you know I used to work for him as his Global Marketing Director. He invited me to come and check out what he’s been working on. So, here’s my take on it … One of the key differences in his thinking is that...
by Dr Lisa | Theory of Constraints Finance, Accounting, and Cash Flow
Brad: Who cares? Is this really that important? In the last 20+ years since Throughput Accounting was invented to replace cost accounting, not very many business owners have even heard of it, much less felt a need to change. Dr. Lisa: True. Most just went out of...
by Dr Lisa | POOGI Series, Theory of Constraints Finance, Accounting, and Cash Flow
You can also perform a sensitivity analysis to determine the breakeven level of T/CU. In this example, it would be the Operating Expense level of $615,000 divided by 2,912 which is $211.20. Pricing with Throughput Accounting is much easier and potentially much more...
by Dr Lisa | POOGI Series, Theory of Constraints Finance, Accounting, and Cash Flow
Dr. Goldratt says it this way: “If a process of ongoing improvement is what we are after, which of the three avenues of Throughput, Inventory, or Operating Expense is more promising? If we just think for a minute the answer becomes crystal clear. Both Inventory and...
by Dr Lisa | POOGI Series, Theory of Constraints Finance, Accounting, and Cash Flow
We have discussed some of the problems with Cost Accounting, yet only touched on the alternative, “Throughput Accounting”. We promised to explore Throughput Accounting in more depth, and explain how implementing its concepts will help you understand the rate at which...
