Question

2. What are Jonah's three measures for evaluating the performance of Alex’s plant and what are his definitions for each (Chapters 8 and 10)? How do his definitions of the terms that he uses for those measures differ from the traditional business definitions of them? Explain your answers.

Jonah's three measurements included: reducing inventory and operational expense while also increasing throughput at the same time. Inventory is the money spent on products which will sell once ready. Throughput is making money through sales. Lastly, operational expense is the money that a company spends on the production of the product.  

These terms are defined in a manufacturer setting where there are warehouses with inventory, products from throughput being shipped out to be sold, and with factories/plants where operations to make or assemble the product occur. In a traditional business setting, such as a retail store, the inventory or goods are typically already made, the throughput would be the sale of the product such as a shirt, and the operational expenses would include the labor of sales people.

Reply to the answer, and explain and write a paragraph answering the reply.

Answer 1

Yes, these terms are differ from the traditional business definitions of them because inventory include all three kind of inventory such as raw material, work in progress and finished goods. But in traditional business inventory are products which are already delivered and ready to provide to the final customers. Operation expenses are spend by the company at the time of production of the goods but at traditional business they are the expenses which incurred for sale of the products. Last, throughput are the amount which spend for items passing through a system or process. But in traditional business they are the expenses of the sale of products.

*PLEASE RATE WITH A THUMBS UP *