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Chapter 2: Q11OQ (page 312)

Question:What is the term for a flowchart that is used to separate value-added from non– value-added steps in a process?

Short Answer

Expert verified

Answer

Opportunity flow diagram.

Step by step solution

01

Value-added and non-value-added steps

The value-added steps are those steps for which the customers are willing to pay that create some value for the customers and an example of these types of steps could involve the change in the forms or steps of production as per the demand of the customers.

Whereas, the non-value-added steps are those steps for which the customers are not willing to pay the price and are not involved in the process of creating value for the customers. Examples of such steps could be transportation, over-production, inventory, etc.

02

About the Opportunity flow diagram

An opportunity flow diagram is a tool that is used to separate the value-added steps from the non-value-added steps that are very necessary for the business as it will be responsible for revenue generation. This information reveals the areas of the business that needs improvement.

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