added value

• What is added value in a business context?

  Value added to raw materials during production
• How is added value calculated?

  Difference between raw material cost and selling price
• If a carpenter sells a table for £104 and the materials cost £24, what is the added value?

  £80
• What must be deducted from added value to determine profit?

  Wages and overhead costs
• Does added value apply only to goods?

  No, it also applies to services
• How does a wholesaler add value to baked beans?

  By selling them for more than purchase price
• What are some ways to increase added value for goods and services?

  Purchasing cheaper materials, improving efficiency
• What is a potential risk of raising the price of a product?

  It may decrease overall revenue
• How can brand status contribute to added value?

  It allows higher pricing than competitors
• What are examples of additional services that can add value?

  Technical helplines and installation services
• How does improving customer access add value?

  By making products more convenient to obtain
• What are the discussion themes related to added value?

  • Difference between value added and profit
  • Calculation of added value
  • Methods businesses use to add value
• ways to increase added value:

  • purchasing cheaper raw materials
  • however, care must be taken that quality is not compromised
  • improving the efficiency of the production process
  • raising the price of a product
  • PED is the key issue and should be evaluated
  • achieving brand status for a product
  • offering additional services with a product
  • improving customer access or convenience is a well proven method