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[...]... 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 with it Those who have not will benefit by knowing a little background TOC, as a management. .. the constraint management and the relationship of constraints accounting to success An intriguing intellectual journey awaits you start reading! H William Dettmer Port Angeles, Washington April 9, 2004 Preface In their quest for success, some organizations seem to dip their hands into a bag of programs, hoping that the one they extract will bring them glowing results that turn up on the bottom line... key to the next And when you do, the keys to controlling the process of ongoing improvement which flows through to the bottom line will be in your hands John Caspari Pamela Caspari Grand Rapids, MI August 2004 Acknowledgments This book is an international effort worthy of the third millennium Its content is based on observations and conversations concerning the theory of constraints (TOC), management accounting, ... Ongoing 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 94 104 115 Pricing Cost-Based Pricing Constraint- Based Pricing Decoupling Throughput from Operational Expense Constraints Accounting Approach to Pricing... 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... 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 57 ix x Contents CHAPTER 4 CHAPTER... bottom-line profitability Our exploration of a constraint management approach using constraints accounting as a catalyst to lock in a process of ongoing improvement begins by probing strategies for evaluating common decision alternatives We need reliable and easily applied decision rules to guide our daily actions A thinking bridge links a rule of thumb with bottom-line profitability through cause-and-effect... done the TOC community, and the business community at large, a great service in writing this book In presenting the concept of constraints accounting, they reveal the relationship—the bridge, if you will—between the cost world and the throughput world It’s this bridge that distinguishes true constraint management from the theory that led to it And the authors make it clear that succeeding at TOC and... financial numbers to guide management behavior Perhaps best of all, in this book the Casparis have put “bean counting” in the proper context of the entire organization and its activities They relate throughput and cost financial metrics to the people of the organization and their activities Most financially oriented books don’t do this How does constraints accounting relate to product pricing? to manufacturing... management accounting, constraint management, corporate governance, ethics, logic, corporate capital markets, and social dynamics These conversations took place with a large international group of people interested in constraint management dynamics through multiday symposia and training programs from 1985, when John first encountered Eli Goldratt and Bob Fox at the Institute of Management Accountants . 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 Constraints Accounting to Drive Improvement John. 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. 257 Strategy 257 Successful Constraint Management 262 APPENDIX Accounting System Structure 273 Brief History of Cost Accounting 273 Cost and Revenue Flows 281 Constraints Accounting Similarities