1)The Goal - Definitions

Management Jan 20, 2021

Expert Solution

1)The Goal - Definitions

Answer:

The GOAL - To Make Money - Net profit, ROI, Cash Flow

To make money by increasing net profit, while simultaneously increasing return on investment, and cash flow

Three performance metrics to achieve the GOAL

1) Throughput
- Rate at which the system generates money through sales (not production)
- Product produced but not sold is not throughput
2) Inventory
- All the money the system has invested in purchasing things it intends to sell
- Products, value of the plant, equipment, and scrap that can be sold
3) Operating expense
- All the money spent in the system in order to turn inventory into throughput
- Labor, depreciation, lubricating oil

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote