Dear all,
I don’t understand the difference between throughput accounting and key factor analysis (“plan with one limiting factor”)?
Because for me, both are used to make the best use of the scarce ressource.
Could you please explain me the difference and also tell me how the company choose between both methods?
I hope my question is “clear”.
I thank you a lot in advance.
Alexandra
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Throughput Accounting Vs key factor analysis
6y ago#1They are both used to make the best use of limited resources.
Key factor analysis bases the decision on the contributions, whereas throughput accounting assume that all costs apart from materials are effectively fixed costs and so bases the decision on the throughput instead.
The reason for this is all explained in details in my free lectures.
The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.
Thanks :) I already watched the lecture (a few weeks ago). I will watch it once again. Have a nice week end. Alexandra
6y ago#3You are welcome, and you have a nice weekend also :-)
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