What is the link between our cost measurements and plant performance? Why is it important to be careful what you measure? You may use the book The Goal by Goldratt to help answer.
I'll answer this question as per my knowledge is concerned as I couldn't refer to the book above mentioned as of now
Normally, when we purchase or plan to purchase a plant, we consider various factors among which cost play's a very vital role.
If the plants performance is as desired or up to the mark , we can reduce costs which need to be spent on it in.order to make its performance better and longer.
If the above mentioned criteria is not achieved, we may have to incur at times huge costs in order to make the performance as desired by us.
Hence, there is a direct link between the cost and plant performance and that is the main reason why we should be very careful while measuring them.
There also exits few other factors but this will be the key one as per my opinion. Thank you.
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