The Goal By Eliyahu M

The main character in “The Goal”, Alex Rogo, manages a production plant that is unprofitable and not efficient with its resources. Alex is given a short amount of time to turn the operations at the plant around and make it an efficient, successful production plant. Throughout the book, Alex Rogo speaks to Jonah a number of times and learns a great amount of information from him. The first significant time that Alex and Jonah spoke was during their chance meeting at an airport lounge. During this conversation, Alex learned a great deal about productivity and goal setting. Jonah explains to Alex that a company has one goal and that the manager must be open about the goal. Jonah then discusses the definition of productivity with Alex and tells him that the true definition is bringing a company closer to its goal that it has set. Among these concepts that Alex learned, he also learned more about his own management style and how it could be improved. Alex learned that he must question common concepts regarding managing and that he must think differently in order to be successful.

It is stressed in the Goal that there is a massive difference between throughput and efficiency. The novel makes the case that having an efficient operation does not equate to profitability. What does equate to profitability is to increase the throughput of any given operations system. Jonah tells Alex, “Throughput, is the rate in which the system generates money through sales.” (Goldratt, E.M. (2014), The Goal, pg. 60). Jonah goes on to explain to Alex that inventory is all the money that was invested in purchasing things that the system intends to sell. (Id). Furthermore, operational expenses are those costs that are required to turn inventory into throughput. (Id, at pg. 61). The definitions of these three measurements are not standard definitions for an MBA student. It is an interesting perspective on how to view operations.

4. What inventory method is used to value inventories? Does this method reflect current cost at year-end?

330-10-30330-10-30-1 The primary basis of accounting for inventories is cost, which has been defined generally as the price paid or consideration given to acquire an asset. As applied to inventories, cost means in principle the sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article to its existing condition and location. It is understood to mean acquisition and production cost, and its determination involves many considerations. 330-10-30330-10-30-2 Although principles for the determination of inventory costs may be easily stated, their application, particularly to such inventory items as work in process and finished goods, is difficult because of the variety of considerations in the allocation of costs and charges.

The Goal by Eliyahu Goldratt is an entertaining and thought provoking business book. The story is about Unico manufacturing plant and its manager – Alex Rogo whose job and marriage is hanging in the air. Bill Peach, who is the factory executive comes into the plant and notices that production has gone down since Alex has been appointed manager. There is six months of production backlog and late shipment of order to customers. Unico is neither productive nor profitable. As a result Alex finds himself in an uncomfortable position of having three months to turn things around or the plant goes downhill.

When reaching out to Jonah, Rogo is to some extent perplexed of why the plant is not performing as expected, he is instructed to define the true goal of the firm. After contemplation, Rogo managed, with help of one of his accountants, to expand the ultimate goal “to make money” into essentially three categories: “to increase net profit, while simultaneously increasing return of investment, while simultaneously increasing cash flow”. The measures, as outlined by Jonah, of this overarching goal were; Throughput, Inventory and Operational Expense. Throughput refers to the rate at which the system generates cash from sales, Inventory is defined as the total money invested in purchasing things intended to sell, whereas Operational Expense is the cost associated with turning inventory into throughput. These measurements as defined in the Goal differ in

The Goal by Eliyahu M. Goldratt and Jeff Cox is a Business Themed novel with the objective of teaching readers about Science and education. Eliyahu Goldratt is an Israeli businessman and physicist who is best known for his work on the Theory of Constraints and the idea of bottlenecks in a business process. Before Goldratt wrote and published his first book, he was a chairman and shareholder of a company called Inc. Magazine. It came from the sheer frustration of this company that he started work on his novel to try and convince his colleagues of the concepts he was trying to convey. At the start, not even his writer, Jeff Cox, thought he was going to be successful but today his book has sold over two million copies.

The success of the economic agents depends on a multitude of forces, such as the managerial ability to combine and exploit the resources in an efficient manner, the ability to manage the labor force or the ability to develop positive relationships with the external stakeholder, such as the customers, the business partners, the public and so on. Still, while all these factors are crucial, they are merely adjacent to the core operational function which builds towards organizational success, namely the organizational operations.

The goal is a very interesting story. It is more about a plant manager who faces personal and professional challenges. Alex earns a master’s degree in both Engineering and Business Administration. He works as Engineering Manager at UNICO Company, which produces a variety of finished goods for another plant and used as component item. His logical philosophy, family issues, and top management pressure makes him a creative and successful manager in the world of business.

The TOC mainly focuses on increasing throughput, instead of reducing operating expenses, as a source of improving financial performance, and an awareness that performance is affected by various constraints. The main TOC measures are Throughput(T), Inventory(I), and Operating Expense(OE). These measures are global, i.e. they measure the results of whole organization rather than parts of the organization. While traditional methods of OM discuss cross functional aspects, TOC approach emphasizes on measuring and improving system wide results and identifying factors that restrict the performance of whole system. It recognizes the effect of variability dependency on the performance of the system and uses the dice game to illustrate the impact. TOC framework include drum buffer rope scheduling system, buffer management, VAT analysis and five focusing steps to identify and control system

Managerial accounting is focusing on providing information within the company to help manager more effectively in operating the company. Managerial accounting also provide instruction at a manufacturing enterprise about the computing cost of products. Then these costs will be used in the external financial statements. Managerial accounting is also referred to as "strategic finance" (Principles of accounting: Volume II, 2012). Besides this, managerial accounting will also include cost behavior, operational budgeting, capital budgeting, activity based costing, break-even point, profit planning, relevant costs for decision making and standard costing. Based on Managerial Accounting third edition, cost behavior is how cost change as volume changes. The three most common cost behavior is variable, fixed cost and mixed cost. Capital budgeting is the process of making capital investment decision. Capital investment is including buying new euipment, building new plants, automating production and developing major commercial website. An operating budget is a combination of known expenses, expected future costs, and forecasted income over the course of a year. The break-even point is a point where total sales and total cost are equal. Break-even point can be described as a point where there is no net profit or

It is remarkable that all five objectives can be competitive advantages and companies can formulate their strategies on baise of the mission and objectives they prefer. Competitive objectives of one business will be translated into functional strategy of operations. All business hope to be competitive in all dimensions. However, any company cannot excel on all dimensions and must set competitive priorities which are considered as the most important to its operations and organizational strategy. There is a hierarchy in the objectives adopted by business, accordingly, translational objectives of operations provide operation managers with basic fram of operation strategies. For example, the printing services companies aim to grow rapidly, offer fast service and realize the economies of scale. In the operational practices, managers attempt to achieve organization goals by prioritizing the fundamental operational objectives

After identifying the problem, Company X is ready to define the goals and objectives. First off, the company knows that it needs to increase the amount of revenue and profit. To do this the company needs to grab back its customers and possibly gain new ones. Company X knows that regaining customers means a change in company policy and building high quality programs. Upper management has decided the company must implement a standardized list of procedures and processes in order to gain structure and organization.

Walmart takes advantage of advanced technology and innovation in optimizing its inventory management performance. There are several factors that affect the success of this business, Walmart's inventory management is one of the keys to the company's success. Given the size of the Walmart company, effectiveness and efficiency must be done in managing the company's inventory. Walmart is currently innovating in determining their inventory management strategies, and the company has proven successful vendor inventory management effectively that allows suppliers to access data from Walmart information systems, such as current inventory level data and the level of certain items sold. Thus, the supplier can determine the exact time to send additional items as inventory to Walmart, while Walmart only monitors and controls the goods that transit actual from the warehouse to the store “Walmart: Inventory Management” (2017).

Operations management has been the most crucial part of a business since people starting trading goods and services. Operations management deals with the development, manufactoring and production of the goods and services which are then marketed and sold in the market for a profit. It involves and oversees the research and decelopment sectors all the way through production of the goods and services to meet the customers’ requirements. Simply stating, operations management deals with the responsibility to ensure that all of the business operations are efficiently and effectively executed by using the least amount of resources but maintaining the quality standard of the company. Financial analysis plays a crucial part in maintaining a successful and efficient operations management in a company. There are multiple financial ratios which are very helpful to understand the proper management and execution of different sectors within operations management to decrease cost and expenditures for the company and increase profit and earnings.