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Measures used in the Theory of Constraints.

Gratitude And Love (1 Points)

13 April 2021

Why Raw Material Stock consider in Investment key measure instead of Throughput Contribution measure ?

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yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 13 April 2021

Throughput contribution is the difference between revenues and direct material costs for the units sold and this is profitability analysis. While Raw material, WIP & finished goods are held under assets and the buyer of the company looks up if he has a negative or positive net worth before purchasing that company.

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