Throughput Accounting in Strategic Cost Management: An Application
Strategic cost management considers costs as a factor that has to be managed for gaining competitive advantage. Theory of Constraints is an alternative approach which aims to eliminate the inadequacies of the traditional cost and management accounting techniques in the face of advanced production sy...
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| Format: | Article |
| Language: | English |
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Dunarea de Jos University of Galati
2016-09-01
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| Series: | Annals of Dunarea de Jos University. Fascicle I : Economics and Applied Informatics |
| Online Access: | http://www.eia.feaa.ugal.ro/images/eia/2016-2/Kirli.pdf |
| Summary: | Strategic cost management considers costs as a factor that has to be managed for gaining competitive advantage. Theory of Constraints is an alternative approach which aims to eliminate the inadequacies of the traditional cost and management accounting techniques in the face of advanced production systems. Theory of Constraints argues that constraints in the production process negatively affect the performance and the profitability of company; because of this constraints have to be managed efficiently. Theory of Constraints bases on management of constraints in the continuous improvement process. Identifying the constraints and managing them efficiently increase the profitability of companies significantly. In this sense, with a hypothetic example in the last section of the study, the effect of efficiently management of a capacity constraint, a kind of constraint, to the profitability of company examined comparatively by Theory of Constraints and traditional contribution margin approaches. |
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| ISSN: | 1584-0409 1584-0409 |