SImulations and Games

Why modern manufacturing still runs like a ’57 jalopy

Management accounting isn’t the sexiest field of study in the world, and probably most accountants don’t ride Harley Davidson motorcycles, they don’t go skydiving and they don’t like to do things differently. But a revolution is brewing in the world of management accounting that is making businesses take a fresh look at how they figure out how much money they’re making. The surprising fact is that they’ve been doing it wrong all these years. Typically, accounting principles measure profitability at a very detailed “margin per unit” level. And while correct, it’s not completely correct and surprisingly, it doesn’t take into…

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