ABC Industries, a vertically integrated producer and retailer of high end audio visual equipment has mapped out its overall business process as beginning with product development followed by product testing then raw materials purchasing then manufacturing and assembly, and, finally, sales and service.
Finance staff at ABC Industries are trying to evaluate the efficiency and the effectiveness of each process and the relationship between each process. This evaluation is often referred to as:
- Process improvement.
- Continuous quality improvement.
- Value chain analysis.
- Benchmarking.
Answer(s): C
Explanation:
Choice "c" is correct. The process of developing macro level flow charts of business processes that produce products or services and then identifying the value added by each process is referred to as value chain analysis.
Choice "a" is incorrect. Process improvement represents the results of total quality management efforts. Choice "b" is incorrect. Continuous quality improvement represents an unswerving focus on customer satisfaction and quality, not necessarily the specific steps associated with value chain analysis.
Choice "d" is incorrect. Benchmarking relates to determining best practices and, often, using those practices as standards.