Balance/service/throughput

From eg

The balance/service/throughput living ontology pattern generalizes Herman Daly's gain/loss/control model for financial capital to cover three of the five ins:

• individual capital which unlike others must balance rest/play/work, or as Daly puts it, satisficed to achieve satisfying benefit (in the human capital sense)
• instructional capital which unlike others define and characterize service and contract relationships, which service must be maximized given other accumulated capital
• infrastructural capital which unlike others is used up or worn out proportional to throughput of physical goods, and accordingly should be minimized given accumulation.

The use/rent/return pattern achieves these goals inherently, by contrast the owner-driven rent/use/return pattern paranoiacally preserves infrastructure owners trust.

[edit] Throughput and inventory

"Throughput replaces output, a variable that can be manipulated to make financial accounting statements more attractive to investors." In the strict service economy model assumed in ultra methods, "throughput would be the money received for services, not products or commodities; Product or commodity sales would have to include warranties or inspections or certifications as services sold with the product." - openpolitics.ca: throughput accounting.

Neither output that is delivered to a warehouse rather than a customer, nor internal services, count as throughput though they could counts as output.

"Inventory (I) is the money the system has invested in things it intends to sell, money which it cannot use for another purpose until then. In addition to conventional fixed costs like buildings and machinery, electricity, labor, adhesives, lubricants, and many other items that usually count as variable costs are part of Inventory." - en: wikipedia: throughput accounting

This reduces every capital asset to a current value in financial capital only. By contrast the value of life ratio can be calculated based on throughputs of four other styles of capital, including two of the five ins: instructional capital and infrastructural capital. Value must be measured as replacement or resale, not "book" value, which is an accounting fiction. See Capital Cost Allowance for more on how the varying degrees to which throughputs wears out capital assets is modelled in accounting.

An "operating expense (OE) is the money the system spends to convert inventory into throughput. OE is variable cost in the strictest sense; raw materials and components that go into a product is the best example." An activity-based costing and total cost of operations domain analysis is probably required to determine the full cost accounting on services.

Throughput accounting provides the basic information required to minimize or maximize or optimize throughput of financial capital. It improves on ((full cost accounting)) by considering the cost of management or creative design to be a form of labour - rather than treating it as "special" or "meta". The continuous improvement of all processes using the creative component - individual capital - is the major source of reductions in the total cost of operations. 1. more money in - increase throughput how? 2. money trapped - reduce inventory how? 3. less money out - reduce operating expense how?

In other words, once it's reduced to one style of capital, typically money, it's analyzed like any other in/via/out analysis.

The other two of the five ins, integrity and insolence are required to keep checks and balances working. Without these, the above is subject to abuses as well.