135 added value

Question 1

explain what is meant by added value

Answer 1

process of increasing the worth of raw materials by motifying it eg.deisgn, conveinience, branding ect

Question 2

addded value calculation

Answer 2

selling price - costs of bought in materials (eg.raw materials/inputs)

Question 3

explain ways of increasing added value (purchasing cheaper raw materials)

Answer 3

-purchasing cheaper raw materials reduces cost per unit-improves added value if it continues selling the product at the same price

(-) however, depends on the quality of the raw materials, as customers won’t buy low qaulity materials

Question 4

explain ways of increasing added value (improving efficiency of production proceess)

Answer 4

(+) easier to meet customer demand/deadlines/and pay suppliers on time -relaible eg.machinery/training

(-) depends on the amount of workersthe business has and how motivated they are

Question 5

explain ways of increasing added value
(raising price of a product)

Answer 5

(+) high price-perception of high quality-product desireability

(-) price elasticity of demand-issue-raising price of a price sensitve product-fall in revenue

Question 6

explain ways of increasing added value (improving customer acsess/convenience)

Answer 6

(+) customers needs and expectations are being met- allowing for higher prices to be charged
(-)may distract business from quality, high operatitonal costs eg.expanding/distributing

Question 7

explain ways of increasing added value (achieving brand status)

Answer 7

(+) loyalty allows for greater customer satisfaction upon purchase-raising the price they would be willing to pay

(-) depends on market research effieciency, may be outside the busineses core skills-inexperience may affect quaity of additional service

Question 8

importance of added value to customerss

Answer 8

(+) will recieve more for their money-> better quality, enhanced features, better service- high customer satisfaction
(-) may lead to increased prices

Question 9

importance of added value to suppliers

Answer 9

(+) increased orders, paid on time-reliable
(-) if a business demands too much cost-cutting from suppliers it could strain the relationship-unwilling to give discounts

Question 10

importance of added value to employees

Answer 10

(+) added value-increased sales-business grows-job security so stable work environment, higher profits-employees can train/improve