Concepts from "The Goal"
Throughput: It is the rate at which the system generates money through sales.
Inventory: It is all the money the system has invested in purchasing things it intends to sell.
Operational Expense: It is all the money the system spends in order to turn inventory into throughput.
Bottleneck: It is any resource whose capacity is equal to or less than the demand placed upon it.
Non-Bottleneck: It is any resource whose capacity is greater than demand placed upon it.
"Balance Flow not Capacity."
Flow through Bottleneck = Market Demand
Bottleneck will determine throughput. E.g. Herbie the fat kid on the hike.
Inventory: It is all the money the system has invested in purchasing things it intends to sell.
Operational Expense: It is all the money the system spends in order to turn inventory into throughput.
Bottleneck: It is any resource whose capacity is equal to or less than the demand placed upon it.
Non-Bottleneck: It is any resource whose capacity is greater than demand placed upon it.
"Balance Flow not Capacity."
Flow through Bottleneck = Market Demand
Bottleneck will determine throughput. E.g. Herbie the fat kid on the hike.
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