added value Flashcards
1
Q
what is added value
A
difference between cost of production and price of product sold
2
Q
why is added value important
A
- higher profit margin
- increase growth potential
2
Q
how is added value calculated
A
selling price - cost of inputs
3
Q
what are ways to increase added value
A
- improving product quality
- innovation
- reduce costs without reducing quality
4
Q
how does it impact stake holders
A
- shareholders: increased stock price
- employees: potential for higher wages, job security
- customers: enhanced products or services that meet expectations
- suppliers: more consistent demand for raw materials
