ABC and Theory of Constraints in a Non Profit Environment

In this thesis done in the Air Force Institute of Technology, ABC costing and Theory of Constraints are reviewed, compared and used in order to improve the performance of an organization that is not for profit. In this case the maintenance unit of the air force (AFMC).

This is a very through report, over 150 pages long, that covers all the basics before it dives in.

First important take away is that for a non-profit organization a primary challenge is to define its purpose in a way that will allow management to measure it. This is done in for-profit organization by the definition "to make money now and in the future" which is measurable  Defining the purpose correctly, so it can be measured, is imperative, as it allows the managers to measure and compare decisions in terms of their impact on the goal.