The objective of this thesis is to demonstrate the use of the Activity-Based
Costing (ABC) approach together with the Theory of Constraints (TOC) philosophy in
determining the optimal product-mix and restrictive bottlenecks of a company. The
contribution of this thesis is a new product-mix decision model that uses activity-based
cost information. This new model is proposed to be used with the TOC philosophy in
order to improve the financial performance of a company.