Throughput Accounting Metrics

Throughput Accounting in a software development project Throughput Accounting is the method of doing management accounting derived from the Theory of Constraints. There are 3 important variables: Investement: the money that's tied up to generate throughput (e.g. machines, raw materials...) Operational Expense: the money that has to be spent to keep the company running (wages, electricity...) Throughput: the money that comes in to  the company through sales. More about the relationship between those variables here These variables, and the derived variables "Net Profit" (NP=T - OE) and "Return on Investment" (ROI = NP / I) give us a way to steer the company. Question: how can we translate those variables to the daily work we do on a software project? What are our investment, operational expense and throughput? What development variables affect the troughput accounting variables? If we can get a few of such indicators, we might be able to better steer our projects. --- Some books on the subject     See also Pascal's blog

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Changed on 08/05/2006 by Pascal	Contact the site administrator: agileopen