The Goal Summary

Decent Essays
Throughput and Inventory and Operational Expense

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. As an MBA candidate about to graduate, I would define
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(The Goal, pg. 87). A real life example of this would be the process of getting to work. In order for me to be at my desk, I would have to drive there. Before I can drive there, I have to put my keys in the ignition. Before that, I have to leave my house and walk to the car. In order for me to be at work, there are certain steps that I must take in order to get there. Statistical fluctuations are the unknown anomalies that affect the process. Let’s say I have to be at work by 10:30 AM. Easy enough, I know how many miles it is from my home to work, and I have a good estimation on how much gas is required to get there. The statistical fluctuations in the process of getting to work at 1030 would be if there was an accident on the highway, or I get a flat tire, or a freak storm shuts down the main highway there; all these anomalies delay my arrival time. These are statistical
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