Throughput Economics: Making Good Management Decisions

Schragenheim, Camp, and Surace's book Throughput Economics provides a practical methodology for better decision-making by focusing on the impact of decisions on a company's bottom line. It challenges the current thinking of cost-per-unit calculation and offers a process that considers financial impacts, capacity limitations, and uncertainty, providing a range of reasonable results.

Format: Hardback
Length: 270 pages
Publication date: 25 June 2019
Publisher: Taylor & Francis Ltd

Schragenheim, Camp, and Surace, three influential figures in the TOC community, are taking on a significant issue that undermines the value of corporations: the misuse and abuse of traditional cost accounting. In their book, they present a practical methodology aimed at improving decision-making by examining the impact of specific choices on a company's bottom line. This well-defined approach empowers mid-managers, higher-level managers, and financial staff to create genuine value by focusing on what truly matters.

Boaz Ronen, Professor Emeritus at the Coller School of Management, Tel Aviv University, Tel Aviv, Israel, strongly recommends Throughput Economics as a valuable resource for entrepreneurs and managers seeking to enhance the resilience of their organizations. Andrea Zattoni, CEO of Antifragility, Italy, echoes this sentiment, emphasizing that Throughput Economics offers valuable insights that managers can apply to their own companies.

Management accounting may be perceived as a dry and technical field, but Throughput Economics is anything but dull. It provides managers with a wealth of knowledge and practical applications that they can readily incorporate into their operations. Rudolf Burkhart, Business Development Director at Vistem Gmbh, Germany, shares this viewpoint, stating that Throughput Economics offers valuable insights that managers can use to improve their company's performance.

One of the key challenges addressed by Throughput Economics is the traditional approach to evaluating cost, risks, and rewards in deals and new market opportunities. The book proposes a different perspective, emphasizing the importance of considering the overall performance of the organization when making decisions. The process involves the intuition and expertise of key individuals within the organization, combined with relevant data, to generate the most accurate information available. This information is then used to establish a reasonable range of net profit that can be expected when the proposed decision is implemented alongside the organization's existing activities.

The book provides detailed explanations and examples to illustrate the application of the Throughput Economics process. It showcases a variety of cases where organizations face new and non-trivial ideas, requiring them to make critical decisions. By applying the methodology, these organizations are able to make informed choices that not only enhance their bottom line but also contribute to the overall growth and success of their businesses.

In conclusion, Throughput Economics is a groundbreaking book that offers a practical and innovative approach to decision-making in corporations. By challenging the traditional methods of cost accounting and focusing on the impact of decisions on the organization's overall performance, it empowers managers to create genuine value and enhance the resilience of their businesses. Whether you are an entrepreneur, manager, or financial professional, this book is a must-read for anyone seeking to improve their decision-making skills and drive organizational success.

Weight: 768g
Dimension: 185 x 261 x 22 (mm)
ISBN-13: 9780367030612