Thursday, February 7, 2019

Metrics from The Goal: Operational Expense

The final of three metrics used in the book The Goal is Operational Expense.

Operational Expense is defined as "all the money the system spends in order to turn inventory into throughput".

In other words, what does it cost to take materials and sell them? Equipment, maintenance, consumables like safety gloves, and all of the labor costs are part of this.

Reducing Operational Expense helps to spend less money while making product to sell.

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