ISSN:
0957-6061
Source:
Emerald Fulltext Archive Database 1994-2005
Topics:
Mechanical Engineering, Materials Science, Production Engineering, Mining and Metallurgy, Traffic Engineering, Precision Mechanics
,
Economics
Notes:
Since its inception, cost accounting has provided data to managers for the development of internal organizational performance measures. In the mid 1980s, Dr Eli Goldratt introduced a new management philosophy called the theory of constraints (TOC). This philosophy contained a new set of performance measures which linked together the strategic objectives and operational capabilities of the organization. This linkage allows for the maximization of profits. Since its introduction, there has been a growing amount of evidence documenting TOC's ability to more tightly link local decisions to organizational performance than those of traditional cost accounting. This research used a simple Gedunken experiment to evaluate the difference between strategy driven product-mix decisions based on TOC accounting and traditional cost accounting. In all cases, the constraint-based approach to costing outperformed the traditional approach based on cost accounting.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1108/09576060210426895
Permalink
