Library / Operations Management Principles Framework
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Source changed 2026-10-03 05:29:54 UTC · snapshot created 2026-10-03 05:30:57 UTC · last check 2026-10-03 06:00:20 UTC

OPS.14:2 - Problem

A local efficiency measure can hide what the operation gains or loses. More completed attempts may create no accepted output; accepted output may have no paying demand; recognized revenue may arrive before cash; and lower allocated cost per unit may leave every actual payment unchanged.

Comparing only one attractive option compounds the problem. Its positive net cash gives no answer about the alternative, while a short horizon can make delayed receipts disappear from view.