Which of the following statements is TRUE of business processes?
A) If a value chain's margin is negative, the value should be decreased.
B) Value chain activities differ based on the business processes being used.
C) If a value chain's margin is negative, the costs of the value chain should be increased.
D) The processes implementing a value chain must create sufficient value to cover their costs.

Question

Quizplus · Accepted Answer

The statement that is true of business processes is that the processes implementing a value chain must create sufficient value to cover their costs. This means that the value created by the activities in the value chain must be greater than the costs incurred by those activities in order for the business to generate a profit. A negative margin indicates that the costs are greater than the value created, which is not sustainable in the long run. Increasing costs would only worsen the margin, so option C is incorrect. Option A is also incorrect as decreasing the value would not necessarily improve the margin. Option B is partly correct, as value chain activities do differ based on the business processes being used, but it does not relate directly to the statement about creating sufficient value to cover costs.

Which of the Following Statements Is TRUE of Business Processes