Throughput Accounting Basics

Tra­di­tion­al cost account­ing often dri­ves deci­sions that seem effi­cient but actu­al­ly harm over­all prof­itabil­i­ty. In con­trast, the The­o­ry of Con­straints employs an approach called Through­put Account­ing to guide deci­sions toward max­i­miz­ing the flow of val­ue through the system’s con­straint. Learn the three key mea­sures, the sim­ple for­mu­las for ROI and net prof­it, and how to use these to make decisions.