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According to the Goal
How Eliyahu Goldratt Helps Organizations Examine Their Processes to Achieve Maximum Results
3 May 2005

Christian Winter University of North Texas University Honors Program HNRS 4900 - Special Problems

An Honors Special Problems project conducted by Christian Winter under the supervision of:

Dr. Susan Eve University of North Texas University Honors ProgramAssistant Director

Dr. Vijay Vaidyanathan University of North Texas College of Engineering Department of Engineering Technology Electronics Program Director

According to the Goal

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Table of Contents
Table of Contents ................................................................................................................................ ii Abstract.................................................................................................................................................1 Introduction..........................................................................................................................................2 Reading Summary................................................................................................................................2 Eliyahu Goldratt’s Business Model ...................................................................................................3 Case Study - i2 Technologies..............................................................................................................6 Conclusion............................................................................................................................................7 Definition of Terms.............................................................................................................................8 References .............................................................................................................................................8

According to the Goal

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Abstract
EliyahuGoldratt’s “Theory of Constraints” has helped companies around the world improve their profit margins by effectively managing business processes. Goldratt first introduced his theory in 1984 with the book The Goal: A Process of Ongoing Improvement. This paper summarizes Goldratt’s book and explains the business model he proposes. The model is expanded in his later book, The Theory of Constraints. Further,Goldratt’s business model is examined in a case study of i2 Technologies. i2 Technologies is one of the fastest-growing companies in the world and supplies software to business to help them function according to the “Theory of Constraints.” The success story of i2 Technologies explains why managers in the world’s top companies embrace Goldratt’s model to overhaul their traditional business processesto become more efficient and profitable.

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Introduction
Eliyahu Goldratt is one of the most influential persons in business process analysis. His worldrenowned book, The Theory of Constraints, has overhauled company structures around the world. The book The Goal: A Process of Ongoing Improvement was published prior to The Theory of Constraints, but includes thecore ideas that Goldratt expands on in the later book. The Goal is unique, because it explains a business model in detail through the use of fiction. In fact, the story includes many personal drama elements. Alex, the main character of the story, has extensive marital problems, because he spends too much time at the plant and ignores his spouse and children. Alex eventually balances family life withhis career, but only after he deep consideration of business processes and time away from his family. In order to further promote his ideas, Goldratt founded the Avraham Y. Goldratt Institute in 1996, named after his father. Over the years, “Theory of Constraints” (TOC) experts have expanded his model and contracted with businesses to improve their bottom line potential. By now, the TOC model...