Chapter Summary Of The Book The Goal

1. In the book The Goal, there are three measure that were effective in operation to achieve company's goal: throughput, inventory, and operational expense. According to the book The Goal, it defines throughput as “the money coming in, which the system generates money through sale", inventory as "the money currently inside the system that has invested in purchasing things which they try to sell" and as operational expense "the money that have to pay out in order to throughput to happen". Common features of these definitions are money and the system in which how they are closely related. For instance, as the money enters into the system, money becomes stuck inside the system and money flowing out of the system. These definitions are helpful in determining whether a firm reaches its goal because if the organization increases throughput by reducing both the inventories and operating expenses, it could lead to a better profitable organization. To recap, throughput refers to net revenue that the organization made through its sale or service whereas inventory means the money tied up in fixed assets to enable throughput. Also, operating expense means the money spent to make

In the book The Goal, Jonah defines the bottleneck as any resource which capacity is equal to or less than the demand placed upon it. Jonah states that it is impossible to not have bottleneck; therefore, we should strive to utilize the bottleneck to meet the operational goal. Surprisingly, I have experienced bottleneck. For example, I always take the MTA subway at 42nd street when I go to school. When I get off at 23rd street to where the school is, there is only one revolving door, which only allows one people at a time could go out to the street. Especially when there is a rush hour, people from the train who get out on the 23rd street station all rush to that one revolving door, and creates traffic and waiting time to get out of the station. In this case, revolving door serves as the