Explain the Input-Output Perspective of a Value Chain

question 6

Essay

Explain the input-output perspective of a value chain.

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Definitions:

Make-Or-Buy Decision

A decision-making process used by companies to determine whether to produce a product in-house or purchase it from an external supplier.

Cost Savings

The reduction in expenses achieved through efficiencies, economies of scale, negotiations, or eliminating unnecessary expenses.

Differential Revenue

The difference in revenue from one alternative to another, used in decision-making processes.

Differential Cost

The difference in cost between two alternative decisions, or the change in costs resulting from an increase or decrease in output.