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  With the introduction of Constraint Accounting (CA), TOCCA allows local decision making to be aligned with the goal of the enterprise. The fundamental measures of CA are:  
     
 
Throughput (T) – the rate at which the system generates cash through sales, or the gross revenue less the directly variable costs associated with that sale (e.g. materials)
Operating Expense (OE) – the fixed costs of labour and overheads
Investment (I) – the cash the system has tied up in the business, that is, the fixed and current assets.
   
 
  All organisations, be they for-profit or for-cause, are looking for improvement in ROI, which is calculated as:
By looking at the impact of any decision on T, OE and I, we therefore have a simple, practical and proactive measurement system to support management in achieving the goal of the enterprise.

Constraint Accounting’s Optimisation looks at the most profitable product mix, based on the critically constrained resource.

For more information on Constraint Accounting, please contact us.

 


 
     
 
 
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