Throughput (business)


Throughput (business)

In the business management Theory of Constraints, throughput is the rate at which a system achieves its goal. Often this is monetary revenue and is in contrast to output, which is inventory that may be sold or stored in a warehouse. In this case throughput is measured by revenue received (or not) at the point of sale -- exactly the right time. Output that becomes part of the inventory in a warehouse may mislead investors or others about the organizations condition by inflating the apparent value of its assets. The Theory of Constraints and throughput accounting explicitly avoid that trap.

See also

* Eliyahu M. Goldratt


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