Please Help Thank you Inspection is considered a non value

Please Help! Thank you!

Inspection is considered a non - value added activity True O False

Solution

Correct answer is Option A . True.

Value added activity are those activities which increase the worth of product to customer . Activities for which customer want to pay amount is called value added activity . Activities which increase the price of products in the Market is called value added activity. For example engineering design, machining , assembly, painting and delivery service .

Non value added activity are cost of activity which spent on product but increase the market value of products .These are activities which are done on product but customer is not ready to pay for this activity. Example . Repairs of machine, storage of inventory, building maintenance, inspection, billing of product .

Inspection activity is non value added because customers will not pay for it. This activity done for accepting or rejecting the product so no value added in market value of product.This activity done for taking out defect from Mass of product.