Non-value-added activity at three different publicly traded organizations


Manufacturing Costs: Pick a product and identify four direct materials that are used to create the product, identify at least two types of labor, Identify at least three types of overhead costs, and discuss how the company should be able to do to lower each cost.

Identify a non-value-added activity at three different publicly traded organizations. Explain how each organization might be able to eliminate the non-value-added activity identified. Please make sure not to select organizations that are similar to prior posts.

If a firm has created value, is it also always able to capture that value? How does a firm create value and then what must it be able to do to capture that value? In your answer, provide an example of a firm that has been able to create value. Then discuss whether or not you believe it has captured that value and if so how it was captured and if not why it was not able to do so.

Identify an incentive conflict in your firm, or one you have read about, that reduced firm value. As part of your answer, discuss whether or not one or more of the legs of the organizational stool was unbalanced, and if so, how that contributed to the conflict.

eBay operates the world’s largest online auction. It is a multi-billion dollar business, which in 2018 generated nearly $11 billion in revenue from its operations in about 33 countries. Sellers pay a small fee to eBay to list their items. They provide a description of the item, photographs, the minimum acceptable bid, accepted forms of payment, and other relevant information. Items can be sold at a fixed price or through an auction. In an auction, bidders submit electronic bids over the Internet. After the auction closes (auctions usually last several days), the high bidder receives an e-mail. The high bidder must contact the seller within three business days to claim the item and arrange payment and delivery. eBay provides other support services:
 

Sample Answer

 

 

 

 

 

 

 

 

Manufacturing Costs and Value Analysis

 

I'll analyze the manufacturing costs for a wooden chair, examine non-value-added activities, discuss value creation and capture, and analyze an incentive conflict.

 

1. Manufacturing Costs: Wooden Chair 🪑

 

Here is a breakdown of the manufacturing costs for a simple wooden dining chair and strategies for cost reduction:

 

Direct Materials

 

Direct MaterialCost Reduction Strategy
Lumber (Hardwood/Pine)Implement a Just-In-Time (JIT) inventory system to reduce carrying costs. Negotiate long-term volume contracts with certified sustainable suppliers to secure lower unit prices.

Non-Value-Added Activities

 

A non-value-added activity is an activity that consumes resources (time, money, materials) but does not directly contribute to the value of the product or service from the customer's perspective. Eliminating these activities is a core goal of lean management.

OrganizationNon-Value-Added ActivityElimination Strategy
Tesla (Automotive Manufacturing)Excessive Inventory (WIP): Holding large buffers of partially completed cars or components on the factory floor between production stages.Implement a Pull System (JIT) where materials are only moved or produced when requested by the next stage of production. This requires integrating suppliers more tightly and optimizing the flow of the gigafactory layout to eliminate storage areas between steps.