Adding Value

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  • Adding Value
    • adding value is the process of transformation of inputs into outputs
    • Measured by the difference is the price of the finished product and the cost of the raw materials
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    • Transformation process is through branding, advertising, product features, location and personal services
    • Benefits of adding value is differentiation from competitors, charge a higher price, higher profit margins and target product at a different market segment
    • Resources are elements that go into producing goods
    • factors of production are turning in puts into outputs
    • transformation process is turning raw materials in to finish goods
    • Land incorpates all natural resources needed for production
    • capital helps produce good and services
    • entreprise brings everything together
    • labour physical and mental effort involved in production
    • improving efficiency is by improving fertility of the land, reduce waste, more educationa dn training, higher quality equipment and economies of scale

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