Editing Theory of constraints (section)

===Key assumption===
The underlying premise of the theory of constraints is that organizations can be measured and controlled by variations on three measures: [[Throughput (business)|throughput]], [[operational expense]], and [[inventory]]. Inventory is all the money that the system has invested in purchasing things which it intends to sell. Operational expense is all the money the system spends in order to turn inventory into throughput. Throughput is the rate at which the system generates money through sales.<ref name=essays>{{cite book |author=Goldratt, Eliyahu M. |title=Essays on the ''Theory of Constraints'' |year=1998 |publisher=North River Press |location=[Great Barrington, Massachusetts] |isbn=0-88427-159-5 }}</ref>

Before the goal itself can be reached, necessary conditions must first be met. These typically include safety, quality, legal obligations, etc.  For most businesses, the goal itself is to make [[Profit (economics)|profit]].  However, for many organizations and non-profit businesses, making money is a necessary condition for pursuing the goal.  Whether it is the goal or a necessary condition, understanding how to make sound financial decisions based on throughput, inventory, and operating expense is a critical requirement.<ref name=essays />