The costs associated with non-value-added activities, such as rework, reduce profit because:
A) Such activities are typically performed for unprofitable customers.
B) Such activities are only undertaken because they are necessary for the firm to remain in business.
C) Such activities are not valued by the customer and produce no revenue.
D) Such activities are part of the customer value proposition.

Question

Quizplus · Accepted Answer

Non-value-added activities like rework do not contribute to customer satisfaction or generate revenue, thus reducing profit without providing any compensating benefit.

The Costs Associated with Non-Value-Added Activities, Such as Rework, Reduce