MTP Corporation has performed a value-added analysis of costs for three business processes. The costs were classified on a three-point scale, where Level One represented activities with the greatest value added. The results are shown below: $$\begin{array} { c r r r }
& \text { Process A } & \text { Process B } & \text { Process C } \
\% \text { of costs at Level 1 } & 51 \% & 46 \% & 36 \% \
\% \text { of costs at Level 2 } & 23 \% & 16 \% & 17 \% \
\% \text { of costs at Level 3 } & 26 \% & 38 \% & 47 \% \
\text { Total }& 100 \% & 100 \% & 100 \% \

\end{array}$$
-Based on the value-added analysis, which of the following statements is / are true: (i) Process A does not need any changes since more than half its costs are value-added, (ii) Process C should be abandoned since almost half its costs are non-value added.

Question

MTP Corporation has performed a value-added analysis of costs for three business processes. The costs were classified on a three-point scale, where Level One represented activities with the greatest value added. The results are shown below: $$\begin{array} { c r r r } 
& \text { Process A } & \text { Process B } & \text { Process C } \
\% \text { of costs at Level 1 } & 51 \% & 46 \% & 36 \% \
\% \text { of costs at Level 2 } & 23 \% & 16 \% & 17 \% \
\% \text { of costs at Level 3 } & 26 \% & 38 \% & 47 \% \
 \text { Total }& 100 \% & 100 \% & 100 \% \

\end{array}$$
-Based on the value-added analysis, which of the following statements is / are true: (i) Process A does not need any changes since more than half its costs are value-added, (ii) Process C should be abandoned since almost half its costs are non-value added.

Quizplus · Accepted Answer

Process A still has a significant portion of costs that are not value-added, so it may benefit from improvements. Process C having high non-value-added costs does not necessarily mean it should be abandoned; it may need optimization instead.

MTP Corporation Has Performed a Value-Added Analysis of Costs for Three