Question

Which of the below represents procurement as part of the support value activities in a value chain analysis?

A. Purchases inputs such as raw materials, resources, equipment and supplies.
B. Applies MIS to processes to add value.
C. Distributes goods and services to customers.
D. Promotes, prices, and sells products to customers.

Answer 1

Procurement in value chain analysis is the activity of purchasing inputs such as labor, materials, equipment, and supplies needed for production. Option A correctly represents procurement, which is a crucial support activity in value chain analyses.

Step-by-step explanation:

The question posed involves understanding procurement in the context of a value chain analysis. Procurement, in this sense, refers to the processes involved in obtaining inputs necessary for the production of goods and services. These inputs include resources like labor, materials, and machinery, which are essential factors of production.

When analyzing the options presented, procurement as a support activity in a value chain analysis is best represented by option A: Purchases inputs such as raw materials, resources, equipment, and supplies. This encapsulates the process whereby firms obtain the necessary resources to create their products. This is directly relevant to the market for inputs or factors of production, where firms acquire what is needed to produce goods and services, which they then sell in the product market. This interaction determines how households earn income and in turn, spend it on goods and services produced by these firms.