7
alex goes home and tells his daughter sharon he’s proud of her getting all As on her report card.
he considers looking for a new job but decides he doesn’t want to run away. he decides he also doesn’t want to study a load of theory in school cuz he doesn’t expect it would help. he decides to find jonah.
8
peach rebukes alex for leaving his meeting and insists on meeting him with ethan frost.
alex goes to visit his mother to get his old address book and find jonah’s number. alex’s wife julie dislikes visiting alex’s mother.
alex finds the address book, calls jonah and sez he thinks the goal of a manufacturing company is to make a profit as measured by net profit, roi and cash flow. but those measurements don’t mean much on the plant floor, so how can what measurements are relevant?
jonah sez there are three measurements relevant on the plant floor that are equivalent to the goal of making money: throughput, inventory and operational expense.
throughput is the rate at which the plant generates money through sales.
alex asks about whether production is relevant. jonah sez if something is produced and not sold then it’s not throughput.
inventory is the money the plant has invested in purchasing things it intends to sell.
operational expense is the money spent to turn inventory into throughput.
alex wants to say the value added by labour is part of the inventory.
jonah sez you shouldn’t take the value added into account because it leads to confusion over whether it is an investment or an expense.
alex wants to know how to express the goal in terms of throughput, inventory and operational expense, but jonah doesn’t have time to explain and tells alex he can figure it out but he has to take into account the plant as a whole instead of looking for local optima. alex doesn’t understand.
then jonah has to go and asks for a number where alex can be reached. alex gives jonah his office number.