When a Slice of Pizza at the Student Union Sold

question 69

Multiple Choice

When a slice of pizza at the student union sold for $2, Moe did not purchase any. When the price fell to $1.75, Moe purchased a slice each day for lunch. Moe's reservation price for a slice of pizza must be:

• A)less than $1.75.
• B)at least $1.75 but less than $2.
• C)exactly $1.75.
• D)exactly $2.00.

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Definitions:

Value Engineering

A systematic method aimed at improving the "value" of goods or products and services by using an examination of function. Value is the ratio of function to cost.

Non-value-adding Activities

Tasks or processes that do not add value to the final product or service from the customer's perspective.

Cost Driver Analysis

The examination of factors that influence the cost of a product or service, aimed at finding ways to improve efficiency and reduce expenses.

Root Cause

The fundamental reason for the occurrence of a problem, which when resolved, prevents a recurrence of that problem.