1. What is Added Value?
“Added value” describes any activity carried out by the business that increases the value of its product or service.
The actual “value added” can be found in the difference between the cost of purchasing raw materials and the price which the finished goods are sold for.

2. What can add value? Any process or change the raw material undergoes
A brand
Advertising
Perceived desirability

3. Knowledge of added value is especially important now because:
LEAN PRODUCTION methods aim to cut out any processes which do not directly add value such as:
Holding stock
Unnecessary movement of raw materials or finished stock
Unnecessary people and activities

4. Knowledge of added value is especially important now because:
maximising added value can give competitive advantage
added value can make a low manufacturer cost item more appealing (think brands)
Low cost materials and added value can maximise profits (think property development TV shows)

5. How do brand names add value?
Brand names create an image for the product and show the ways in which it differs from competing products. Therefore brand names add value by creating an image.

6. Methods of adding value to increase sales
Advertising – protects image of company.
Sale promotions – building brand loyalty.
Improving/Changing Packaging – keeping the interest of customers.

7. Adding Value is aimed at achieving organisation objectives:
Profit
Growth
Survival

8. Added value in production
Inputs
Processes
Outputs
Wood ,500
Bricks ,000
Tiles ,500
Land ,000
Frames ,000
Glass ,000
Labour & materials 24,000
(Sand,cement,pipes,etc)
Joining
Brick layering
Plumbing
Digging
Roofing
Painting
Finished new house
51,000
189,000