The Three Main Areas in the Value Chain Where Significant

question 97

Multiple Choice

The three main areas in the value chain where significant differences in the costs of competing firms can occur include

• A)age of plants and equipment, number of employees, and advertising costs.
• B)operating-level activities, functional area activities, and line of business activities.
• C)the nature and makeup of their own internal operations, the activities performed by suppliers, and the activities performed by wholesale distribution and retailing allies.
• D)human resource activities (particularly labor costs), vertical integration activities, and strategic partnership activities.
• E)variable cost activities, fixed cost activities, and administrative activities.

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Definitions:

R&D

Research and Development, which refers to the activities companies undertake to innovate and introduce new products or services.

Product Design

The process of creating a new product to be sold by a business to its customers, focusing on specifications, functionality, and appearance.

Period Cost

Expenses that are not directly tied to production activity and are instead associated with a specific time period, like rent or utilities.

Marketing Costs

Expenses related to promoting and selling products or services, including advertising and market research.