ABSTRACT
The emphasis on added value is a breakthrough insight. The trend of Throughput (T) over time is a most important holistic measurement, which provides an excellent indication of the direction in which the business is heading. When a company brokers outsourced hours of human resources, such as in the case of programmers or service technicians, and pays those resources only for the hours they sell, then it is an example of labor being Truly Variable Costs (TVC). That piecework is seldom utilized, the most common example of labor being TVC is commissions paid to salespeople. The monthly T for Daily Bread is the sum of all sales in that month minus the costs that truly vary with every sale. Assuming the ongoing activity of Daily Bread continues, the TVC includes the materials used for producing the products that Daily Bread sells, such as flour, butter, sugar and milk, packaging.
