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John Moffat.
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chrisi04
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Throughput accounting views stock building as a non-value adding activity, and therefore discourages it.
I cannot understand why it is true.
Kindly, explain why the above statement is true.
John Moffat
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Holding inventory does not earn money, therefore the lower the inventory the better (the just-in-time concept).
Throughput accounting treats materials as the only truly variable cost, but the amount spent on materials only varies directly with the numbers if they are not carrying inventory and therefore buying exactly what they need to use in each period.
chrisi04
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