Throughput Accounting – The Managerial Tool for Decision Making

For manufacturing and service companies

By Eli Schragenheim

Date: 2013-05-01
Time: 09:30-17:00
Place: Vilnius, Panorama hotel (Sodų g. 14, Vilnius)
Language: English

Description of the masterclass

At the core of any business there are the decisions about the products and services the business should sell, determining the prices that ensure good profitability and how much capacity should be maintained.

The common management accounting tools rely on the utopia that a “cost-per-unit” can be calculated per each product. The cost-per-unit yields the main information for making the above decisions. However, that cost-per-unit is always based on critically flawed assumptions and thus many of the above decisions are bad.

Many times high level managers are aware of the cost-per-unit (or cost-per-hour) distortion. Then they base their decisions mainly on their intuition, probably based on some very broad calculations.

Throughput Accounting is a decision-support approach developed by Dr. Eli Goldratt. Its scope has been widen by Eli Schragenheim to truly replace the erroneous cost-per-unit by a process that calculates the impact of adding/changing the product mix on the bottom line, considering the financials and the capacity limitation, taking into account also the means of adding/changing capacity.

The one day master class will start by outlining a leading example where a typical management dilemma is described. The leading example would be used throughout the day to explain the various difficulties until the solution is reached. Smaller examples would be used as well.

The full top management decision making process would bring together the Sales Management with the Operations Management, where each of these critical functions contribution is recognized, so that the best decisions are made and everybody is well aware what they need to do in order to reach the objectives successfully.

Main topics

The main topics to be dealt in the workshop:

  • How top level decisions on product mix are made now?
  • The basic flaws of all cost accounting methods
  • The basics of Throughput Accounting
  • The problem of considering capacity limitations
  • The difference between products and T-Generators
  • The top management decision making platform
  • Developing the key information items required for the decision making
  • Defining the supporting software/Excel to carry the calculations
  • Dealing with uncertainty
  • Q&A


for those who register after 23.04.2013:

  • Regular price for attendee:
    700 LTL / 202 EUR (no VAT)
  • For registered users of “Verslo akademija”:
    600 LTL / 174 EUR (no VAT)
  • For registered attendees of Supply Chain Conference 2013:
    600 LTL / 174 EUR (no VAT)

for those who register by 23.04.2013:

  • Regular price for attendee:
    600 LTL / 174 EUR (no VAT)
  • For registered users of “Verslo akademija”:
    500 LTL / 145 EUR (no VAT)
  • For registered attendees of Supply Chain Conference 2013:
    500 LTL / 145 EUR (no VAT)

Registration – we guarantee fast reaction to your requests.

About Eli Schragenheim

Eli is an Associate Managing Director at Elyakim Management Systems Ltd. (Israel) and an international expert in the Theory of Constraints (TOC) and its links to other management philosophies. He has worked closely with Dr. Elyiahu M. Goldratt, the primary catalyst in the creation of TOC,  for many years. He’s a co-author of the best selling business novel “The Goal III: Necessary But Not Sufficient”.

In 1985 Eli joined Creative-Output, a software company run by Dr. Elyiahu M. Goldratt. The software was called OPT, a very sophisticated software for scheduling the shop floor. The software had challenged some very common paradigms and Dr. Goldratt realized that software is not the right tool to challenge ideas that were taught in the universities and were well ingrained in the minds of most managers. The Goal came up in 1984 and Dr. Goldratt looked for another tool to help people realize the flawed paradigms. The OPT game came out at 1985, to be followed by several “simulators” that were developed by Eli Schragenheim to facilitate the introduction of new ideas. Then, Eli Schragenheim was kindly requested to deliver the first workshop based on the simulators. So, he became as educator, and then also a consultant.

In the last twenty-eight years Eli Schragenheim has taught, talked and consulted in more than fifteen countries, including the US, Canada, India, China and Japan. Eli lead many TOC development and education efforts.

He’s the author of the management best-sellers: