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Issue:

Business

 

Written by:

Michael J

 

Date added:

March 11, 2013

 

Level:

University

 

Grade:

A

 

No of pages / words:

3 / 714

 

Was viewed:

7172 times

 

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These measurements are throughput, inventory and operational expense. According to Goldratt, these are defined as follows. "Throughput is the rate at which the system generates money through sales."; "Inventory is all the money that the system has invested in purchasing things which it intends to sell"; and "Operational expense is all the money the system spends in order to turn inventory into throughput" (Goldratt 60-61)...
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Efficiency ratios do not increase sales. There are dependant and statistical variables that impact the way the plant should be running. The balanced plant concept is based on balancing capacity with efficiency. By balancing your plant with your capacity, you are insuring bankruptcy (Goldratt 86). The reason is due to dependent events and statistical fluctuations...
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