Question

OMs transformation role is to add value. Value added is

a) performing activities well for the least possible cost
b) increasing product value in the first stage
c) customizing a product, regardless of expense, to satisfy customer needs
d) the net increase between output product value and input material value
e) the net decrease between output product value and input material value

Answer 1

The term 'value added' in operations management refers to the net increase between output product value and input material value, emphasizing how the integration of technology significantly enhances product worth.

Step-by-step explanation:

The student's question pertains to the role of operations management (OM) in adding value to a product or service. In a business context, value added can be defined as the net increase between the output product value and the input material value. This concept is very important in understanding how a product gains additional worth through the manufacturing process and the integration of innovative technologies and ideas.

For example, while the physical materials like plastic parts and wiring that go into manufacturing computers may have a relatively small value, it is the technology and the intellectual property that significantly increase the value of the end product. Computer manufacturers add substantial value by developing and integrating advanced processes that enable computers to perform complex tasks.

Therefore, the correct answer among the provided options is d) the net increase between output product value and input material value. This choice most accurately reflects the intrinsic nature of value addition in the field of operations management.

Answer 2

Value added in Operations Management is the net increase between the output product value and the input material value (option d). It involves enhancing the product's functionality, efficiency, and appeal to increase its worth in the eyes of the customer.

Step-by-step explanation:

Understanding Value Added in Operations Management (OM)

Within the scope of Operations Management (OM), the term value added refers to the net increase between the value of the output product and the value of the input material. When OM's transformation role is to 'add value', this typically means enhancing the product's worth in the eyes of the customer through various means. However, it is not limited to customer satisfaction alone. Value can be added by performing activities effectively at minimal costs, customizing products to meet customer needs, or through the infusion of technology and innovation that significantly increases the product's functionality and appeal.

As your question suggests, the net increase between output product value and input material value provides a qualitative measure of the value added. Therefore, the correct answer to your question would be d) the net increase between output product value and input material value. This perspective aligns with the example provided, where the value of physical materials in products like computers is relatively insignificant when compared to the technology and intellectual property that enables the advanced processes.