[...]... Pricing 13 3 13 3 14 7 15 5 Tactical Subordination in Manufacturing Tactical Subordination Drum-Buffer-Rope Scheduling Buffer Management Reporting 17 4 17 4 17 4 17 7 Tactical Subordination in Project Management Common-Sense Scheduling Critical Path versus Critical Chain Project Management Constraints Subordination Reporting in Projects Critical Chain Buffer Reports 19 1 19 1 19 6 19 7 203 206 15 4 Contents xi... $1. 8029) Standard Unit Cost Cost $ 80.00 16 .50 99 .16 $19 5.66 6 Thinking Bridges Exhibit 1. 4 Proposed Change to Widget Manufacturing Process (Scenarios 1, 2, and 4) Workstation 10 1 10 2 10 3 10 4 Original Processing Time 15 minutes 25 minutes 10 minutes 5 minutes Proposed Processing Time 10 minutes 27 minutes 10 minutes 5 minutes Total Time 55 minutes 52 minutes Scenario 1: Least Product Cost Analysis Intuitively,... CHAPTER 1 Thinking Bridges Evaluating Decision Alternatives Thinking Bridges Example 1 1 4 CHAPTER 2 Constraints Two Paradigms Constrained Environments TOC Focusing Process Identifying Ongoing Improvement 21 21 24 31 34 CHAPTER 3 Internal Financial Reporting Early Throughput Accounting Cost Control in a Throughput World Constraints Accounting versus Throughput Accounting Complexity Divide 41 41 45 48... trained The company has other expenses of Exhibit 1. 1 Widget Manufacturing Process Workstation 10 1 10 2 10 3 10 4 Total Time Processing Time 15 minutes 25 minutes 10 minutes 5 minutes 55 minutes Thinking Bridges Example Exhibit 1. 2 Labor and Overhead Charging Rates Cost Element Direct Labor Overhead 5 = Rate per Direct Labor Minute $ 0.3000 = $ 1. 8029 Calculation $18 .00 / hour / 60 minutes / hour (4 direct labor... Improvement Role of the Financial Manager Establishing a Budgetary Revision and Reporting Process Constraints Accounting Terminology and Technique Basic Financial Control Metrics Capital Write-Off Methods Exploitation Decisions 64 64 74 81 94 94 10 4 11 5 Pricing Cost-Based Pricing Constraint-Based Pricing Decoupling Throughput from Operational Expense Constraints Accounting Approach to Pricing 13 3 13 3... 257 262 APPENDIX 273 273 2 81 Glossary Index Accounting System Structure Brief History of Cost Accounting Cost and Revenue Flows Constraints Accounting Similarities and Departures 236 289 299 319 Foreword Reconciliation Practitioners of the theory of constraints (TOC) have been waiting for this book for a long time Many of you reading this now have had substantial exposure to TOC and perhaps even experience... workstations Scenario 1 In the first scenario, the engineer proposes acquiring the fixture and reducing the total processing time by three minutes per unit Here is how the time savings of three minutes per unit is to be accomplished The new fixture would allow some work to be transferred from workstation 10 1 to workstation 10 2 As shown in Exhibit 1. 4, the processing time at workstation 10 2 would increase... CHAPTER 9 208 210 Tactical Subordination in Sales Sales Funnels Sales Commissions Leveraging Constraints to Create Compelling Offers 218 218 228 230 CHAPTER 10 People: A Valuable Asset Empowerment and Respect: Aligning Authority, Responsibility, and Long-Term Commitment Personnel Employment Decisions Mixed Messages 236 2 41 252 CHAPTER 11 Strategy and Conclusions Strategy Successful Constraint Management. .. “Theory of Constraints, ” Section 8a in the 19 93 and 19 94 Supplements to the Management Accountants’ Handbook, 4th edition, Donald E Keller, James Bulloch, and Robert L Shultis, editors, Copyright © 19 93, John Wiley and Sons, Inc., appears throughout the book as appropriate This material is used by permission of John Wiley and Sons, Inc The Management Accountants’ Handbook material on the theory of constraints, ... the organization, and loss of confidence in top management s ability to take control and lead the organization back to robust health Financial numbers are crunched, manipulated, massaged, and sometimes put into hibernation People are downsized, right-sized, tossed into the roiling ocean of unemployment And when favorable results are slow to reappear on the bottom line, the roar and accusations of the . Inc. 5070_FrontMatter 7 /14 /04 1: 52 PM Page i 5070_FrontMatter 7 /14 /04 1: 52 PM Page ii MANAGEMENT DYNAMICS 5070_FrontMatter 7 /14 /04 1: 52 PM Page iii 5070_FrontMatter 7 /14 /04 1: 52 PM Page iv MANAGEMENT DYNAMICS Merging. alt="" MANAGEMENT DYNAMICS Merging Constraints Accounting to Drive Improvement John A. Caspari Pamela Caspari John Wiley & Sons, Inc. 5070_FrontMatter 7 /14 /04 1: 52 PM Page v More Praise for Management. 10 4 Exploitation Decisions 11 5 CHAPTER 6 Pricing 13 3 Cost-Based Pricing 13 3 Constraint-Based Pricing 14 7 Decoupling Throughput from Operational Expense 15 4 Constraints Accounting Approach to