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Throughput Accounting in Strategic Cost Management: An Application

Author

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  • Mustafa KIRLI

    (Manisa Celal Bayar University, Ahmetli Vocational School, Manisa, Turkey)

Abstract

Strategic cost management considers costs as a factor that has to be managed for gaining competitive advantage. Theory of Constraints is an alternative approach which aims to eliminate the inadequacies of the traditional cost and management accounting techniques in the face of advanced production systems. Theory of Constraints argues that constraints in the production process negatively affect the performance and the profitability of company; because of this constraints have to be managed efficiently. Theory of Constraints bases on management of constraints in the continuous improvement process. Identifying the constraints and managing them efficiently increase the profitability of companies significantly. In this sense, with a hypothetic example in the last section of the study, the effect of efficiently management of a capacity constraint, a kind of constraint, to the profitability of company examined comparatively by Theory of Constraints and traditional contribution margin approaches.

Suggested Citation

  • Mustafa KIRLI, 2016. "Throughput Accounting in Strategic Cost Management: An Application," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 2, pages 78-87.
    • Handle: RePEc:ddj:fseeai:y:2016:i:2:p:78-87
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    Cited by:

    1. Romero-Rojas, Julián David & Ortiz-Triana, Viviana Karolina & Caicedo-Rolón, Álvaro Junior, 2019. "La Teoría de Restricciones y la Optimización como Herramientas Gerenciales para la Programación de la Producción. Una Aplicación en la Industria de Muebles|| Theory of Constraints and Optimization as ," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 27(1), pages 74-90, June.

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