About this Presentation
Everyone is quite familiar with the throughput (T) per constraint time per unit, also known in accounting circles as contribution margin (CM) per constraint unit, that applies to product mix decisions when there is an internal constraint. As Eli Schragenheim recently has pointed out, T/constraint time (T/CU), does not apply when there is no internal constraint. Today, many businesses do not have an internal constraint. Assuming an internal constraint exists where there is none, can result in decisions that not only do not improve results, they actually can cause diminished results. Does Throughput Accounting (TA) have nothing to contribute in non-internal-constraint environments? This session assumes that there is a way for TA to address decision making in companies that do not have internal constraints. Several examples will show the superiority of TA, using relevant information, to the traditional cost accounting full-allocation approach. These examples represent real situations. Methodologies exist to handle decisions in a non-internal constraint environment.
What Will You Learn
To help you get the most value from this session, we’ve highlighted a few key points. These takeaways capture the main ideas and practical insights from the presentation, making it easier for you to review, reflect, and apply what you’ve learned.
Instructor(s)
