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Throughput in business is the rate at which a product is moved through a production process and onward to being consumed by an end-user, usually measured in the form of sales or usage statistics. The goal of most organizations is to minimize the investment in inputs as well as operating expenses while increasing throughput of its production ...
Only costs that vary totally with units of output (see the definition of TVC below) e.g. raw materials, are allocated to products and services. These costs are deducted from sales to determine Throughput. [4] Throughput Accounting is a management accounting technique used as the performance measure in the Theory of Constraints (TOC). [5]
Throughput accounting suggests that one examine the impact of investments and operational changes in terms of the impact on the throughput of the business. It is an alternative to cost accounting. The primary measures for a TOC view of finance and accounting are: throughput, operating expense and investment.
Since the production line is directly linked to the output of the machines, it allows for the identifying of the main bottleneck in the manufacturing process. In changing each machines throughput, it will be possible to assess which machine affects the overall output the most, and hence determine the bottleneck in the chain of processes. [6]
First-pass yield (FPY), also known as throughput yield (TPY), is defined as the number of units coming out of a process divided by the number of units going into that process over a specified period of time.
Industrial production is a measure of output of the industrial sector of the economy.The industrial sector includes manufacturing, mining, and utilities. [1] Although these sectors contribute only a small portion of gross domestic product (GDP), they are highly sensitive to interest rates and consumer demand. [2]
It was created by John R. Costanza, an executive with operations management experience at Hewlett Packard and Johnson & Johnson. [1] Costanza, who was later nominated as a Nobel Laureate in Economics for Working Capital Management, founded the John Costanza Institute of Technology in Englewood, CO in 1984 to provide consulting and education services for manufacturers to implement the methodology.
The method can be used to assess environmental burdens associated with the economic activities of a nation and to determine how material intensive an economy is. The principle concept underlying MFA is a simple model of this interrelation between the economy and the environment, in which the economy is an embedded subsystem of the environment.