The Goal: A Process of Ongoing Improvement

The Goal: A Process of Ongoing Improvement

by

Eliyahu M. Goldratt and Jeff Cox

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The Goal: A Process of Ongoing Improvement Terms

Throughput

Throughput is the money that a business generates through sales. A manager should keep their throughput as high as possible. read analysis of Throughput

Inventory

Inventory is the money that exists within a business system in the form of equipment, assets, raw material, and so on. Anything that exists as inventory can be sold for money. However, inventory represents a… read analysis of Inventory

Operating Expenses

Operating expenses are the money invested in a system to convert inventory to throughput. Operating expenses are intangible and cannot be sold, such as human labor, energy bills, or the depreciated value of machines… read analysis of Operating Expenses

Dependent Events

Dependent events are consecutive events in a system that directly affect one another. Every subsequent stage in a manufacturing system is a dependent event, since one cannot be completed until all the prior stages have… read analysis of Dependent Events

Statistical Fluctuations

Statistical fluctuations are variations in speed or quality as a result of human behavior. Any process that involves human operation will naturally and unavoidably have statistical fluctuations. read analysis of Statistical Fluctuations
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Bottlenecks

Bottlenecks are the slowest stage or member of a system due to limited capacity, which can be used to set the maximum pace for the entire system. A bottleneck’s capacity will always be less than… read analysis of Bottlenecks

Constraints

A constraint is the slowest stage or member of a system due to limited capacity, which can be used to set the maximum pace for the entire system. A constraint’s capacity will always be less… read analysis of Constraints

Return on Investment (ROI)

Return on investment (ROI) measures how much money a business makes versus how much money it invests. read analysis of Return on Investment (ROI)

Net Profit

Net profit measures the actual profit a company makes after all working expenses have been paid. read analysis of Net Profit

Cash Flow

Cash flow measures the amount of money that comes into a business (in the form of profits) and the amount that comes out of the business (in the form of payments and expenses). read analysis of Cash Flow