Chapter 20, Problem 1BTN

To determine

Introduction:

Business Activities and Business Process Model

• There are several business activities that form part of the Business activities and processes on a day to day basis. These outcomes of these processes combined formulate the sum total of the results of operations of the business.

• Breaking down the activities in the entire process, understanding the costs and nuances of each process and breaking down each part of the process to understand how the process works as a whole, are activities that form part of the Business Process Model.

• One such business process is the Order to Cash Cycle. It contains several business activities beginning when a customer enters the organization up until when he leaves after successfully placing and receiving an order.

• Some of the activities are contributory to costs and profits and some are non-monetary items. However the non-monetary items also have a contribution to the bottom line as they indirectly influence the revenues and profits.

• Examples of Value Added activities are: Process of Preparation of Order, Packaging and Delivery of goods etc. Examples of Non Value Added activities are: Waiting time to process customers' orders

Methodology for understanding the Business activities and processes that form part of a company (For Example in a fast food industry as part of the Order to Cash cycle.)