Instead of maximizing income,as measured by traditional accounting methods,the theory of constraints seeks to maximize
A)Contribution income.
B)Throughput contribution.
C)Quality.
D)Gross profit.

Question

Quizplus · Accepted Answer

Theory of constraints seeks to maximize throughput contribution, which is the difference between the sales price of a product and the direct cost of producing it. This approach focuses on increasing the overall efficiency of the production process and improving profits by identifying and addressing bottlenecks that limit throughput. Maximizing throughput contribution can result in increased profitability even if it means sacrificing other measures such as gross profit or traditional accounting metrics.

Instead of Maximizing Income,as Measured by Traditional Accounting Methods,the Theory