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Question: 1 / 400

Explain the term "value-added activity".

Any activity that delays production

Any activity that directly contributes to meeting customer needs

Value-added activity refers to any action or process within a production or service delivery system that contributes directly to fulfilling customer needs and enhancing the value of the product or service offered. This means that the activity not only furthers the production or service process but does so in a way that improves the end product from the customer's perspective. For instance, manufacturing a product according to specific customer specifications, performing quality checks that ensure the product meets certain standards, or assembling components that result in a functional and desirable final product are all examples of value-added activities.

In contrast, the other choices highlight activities that do not align with the concept of value addition. For example, activities that delay production do not contribute to the value perceived by customers and can instead lead to frustration or dissatisfaction. Similarly, while all activities conducted during production may be necessary, not all are value-added; some may be required but do not enhance customer satisfaction. Lastly, activities involving only management input can be critical for strategic oversight or administration, but unless they directly improve the product or service experienced by the customer, they do not qualify as value-added activities. Thus, the key aspect of value-added activities is their direct positive impact on customer needs and satisfaction.

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All activities conducted during the production process

Activities that involve only management input

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