Cost-Based System of Activities and Extent Correlation with the Theory of Constraints in Industrial Companies to Achieve Profitability and Improve Performance
Abstract : Most companies aim to be outstanding and strive to achieve profits in the light of available resources. This goal is achieved through the adoption of companies to adopt many systems and theories that ensure this. Companies may sometimes face the scarcity of resources available to them, so companies must adopt with the applicable system theory that help them to improve performance and increase profitability. In some companies, an activity-based costing system is applied, which helps them relate costs to their cause and helps them divide the company's activities into activities that add value and activities that do not add value. Therefore, the use of constraint theory in the use of activity-based costing system will help the management to significantly improve its performance by knowing which activities do not add value and can be addressed through continuous improvement steps within constraint theory.
Key words : Cost-based system of activities, theory of constraints and achieve profitability and improve performance .