Value Chain and Classification of Costs, Car Company

question 152

Essay

Value chain and classification of costs, car company.
General Motors incurs the following costs:
a. Electricity costs for the plant assembling the Chevrolet Camaro
b. Transportation costs for shipping the Camaro to dealers
c. Payment to Shelby Designs for the design of the Camaro.
d. Salary of an engineer working on the next generation of Camaros
e. Cost of GM employees' visit to an auto show to demonstrate the Camaro
f. Testing the Camaro at the GM track
g. Payment to television network for running Camaro advertisements
h. Cost of brake pads purchased from outside supplier to be installed on the Camaro
Required:
Classify each of the cost items (a-h) into one of the business functions of the value chain.
1) Research and development
2) Design of products and processes
3) Production
4) Marketing and sales
5) Distribution
6) Customer service

---

Definitions:

Group Cohesion

The sense of solidarity, unity, and commitment among members of a group, contributing to its stability and the willingness of members to remain part of it.

Emotional Bonds

Strong feelings of connection or attachment between individuals, often based on love, friendship, or shared experiences.

Clear Boundaries

Well-defined limits or borders that distinguish one entity, area, or concept from another.

Stouffer's Study

A social research study by Samuel Stouffer that explored the attitudes and morale of American soldiers during World War II.