A simulation-based comparison of TOC and traditional accounting performance measures in a process industry

Purpose - Aims to compare performance measurement of a continuous process manufacturing operation under two accounting systems - a traditional cost accounting system and the theory of constraints (TOC) system. Design/methodology/approach - Using a computer-based simulation methodology to capture operational performance, it is found that the TOC-based accounting system presents a more realistic state of performance scenario. Findings - Findings from this research indicate that businesses using a TOC-based system can improve their performance more accurately, and hence gain a sustainable competitive position in the future. Research limitations/implications - This research is limited to continuous process manufacturing operations. Originality/value - The research makes a significant contribution to the knowledge of performance measurement.