This research demonstrates that inaccurate product cost information may lead
managers to choose a non-optimal product mix and to focus improvement efforts on the
wrong processes. As a result, they may decrease the profitability of a company
substantially. A mathematical model that uses the activity-based cost information is developed in this thesis to determine the optimal product mix. This model is proposed to
be used in combination with the TOC approach to focus on the right activity-based cost information is
developed in this thesis to determine the optimal product mix. This model is proposed to
be used in combination with the TOC approach to focus on the right activities to improve
the system