Explain the difference between value-added time and nonvalue- added time.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Explain the difference between value-added time and nonvalue-
added time.
Expert Solution
Step 1
Value-added time:-
- Value added time is the time spent that improves the outcome of a method. this can be usually simply the processing time related to production.
- All of the other intervals related to a method, like wait time and queue time, contribute nothing to the result so are thought of non-value more time.
- This concept is employed to identify non price more activities and eliminate them from a method, so the entire time needed to complete a method is reduced.
- When the period of the production method has been shrunken during this manner, it will be a competitive advantage, since a business will respond additional quickly to customer demands.
- It may be potential to compress the quantity useful more time during a method. However, it's typically easier to first eliminate or cut back non-value more time, since it includes such a large a part of the entire interval.
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