Ep#20 Throughput Accounting: Taking Decisions using Financial Metrics

Counterpoint Podcast

Oct 6

25 min 1 sec

We had discussed problems with the current system of financial decision-making across companies in an earlier episode. In this episode we discuss why it is crucial for all organisational decisions to be taken with a clear assessment of their global impact on the firm. Also discussed is, why the techniques like marginal-costing and absorption-costing, does not suffice for this purpose. A new method is offered which not only overcomes the pitfalls of these traditional methods but also takes into consideration uncertainty of demand and effect of a decision on the system constraint, to arrive at a holistic financial impact of any decision. Tune in to also learn about the software tool developed by Vector to facilitate this holistic decision-making process in any organisation. For more details on this topic, you can check out the article at: https://www.vectorconsulting.in/blog/nuances-of-toc-concepts/throughput-accounting-an-introduction/ For any further queries, please write to us on our social media handles or at https://vectorconsulting.in/

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