Question

Willow Springs produces various wooden bookcases, tables, storage units, and chairs. Which of the following would be included in a listing of the company's non-value-added activities?a. Assembly of tables. b. Staining of storage units. c. Transfer of chairs from the assembly line to the staining facility. c. Storage of completed bookcases in inventory. e. Transfer of chairs from the assembly line to the staining facility and storage of completed bookcases in inventory.

Answer 1

Answer: The correct answer is "e. Transfer of chairs from the assembly line to the staining facility and storage of completed bookcases in inventory. ".

Explanation: The statement "e. Transfer of chairs from the assembly line to the staining facility and storage of completed bookcases in inventory. " would be included in a listing of the company's non-value-added activities.

An activity is everything that consumes resources. The resources consumed can be tangible (materials, time, money) and intangibles (mood, effort, illusion).

Value is what someone appreciates. In economic activities we refer to value as "what someone is willing to pay" for your product. That someone would be the customer. If the Client does not pay it, it is because he does not appreciate it, it does not give it value.

In this case, the activities that do not clearly generate value are "transfer" and "storage". Although there are activities that do not generate value but are necessary such as transfer, storage could be eliminated or optimized so that it is not an activity that limits production or increases costs.