Choose a company with which you are familiar that manufactures a product. In thi
ID: 2462274 • Letter: C
Question
Choose a company with which you are familiar that manufactures a product. In this activity, you will be making reasonable assumptions about the activities involved in the value chain for this product; companies do not typically publish information about their value chain. Describe the product that is being produced and the company that produces it. Describe the six value chain business activities that this product would pass through from its inception to its ultimate delivery to the customer. List at least three costs that would be incurred in each of the six business activities in the value chain. Classify each cost you identified in the value chain as either being an inventoriable product cost or a period cost. Explain your justification. A cost object can be anything for which managers want a separate measurement of cost. List three different potential cost objects other than the product itself for the company you have selected. List a direct cost and an indirect cost for each of the three different cost objects in question 5. Explain why each cost would be direct or indirect.Explanation / Answer
1) Hamam Soap - HUL Hindustan Unilever (HUL) is India's largest fast moving consumer goods company, with leadership in Home & Personal Care Products and Foods & Beverages. HUL's brands, spread across 20 distinct consumer categories, touch the lives of two out of three Indians. In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap bars, embossed with the words 'Made in England by Lever Brothers'. With it, began an era of marketing branded Fast Moving Consumer Goods (FMCG).Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937.
2)
Research and Development
The first step in value chain management is researching the products your customers want. Through careful market analysis, including the measurement of consumer trends, companies can anticipate what people want and have those products available. On the small business level, this could mean working directly with suppliers to produce a new product.
Product Design
Once a new product has been identified or an existing product upgraded to meet anticipated demand, that item is tested, refined and sent on for production. In companies where service is the product, the same planning process is used.
Production Process
Where your product is manufactured can have a significant impact on quality, cost and value. Writing for Business Process Trends, Andrew Feller, Dr. Dan Shunk and Dr. Tom Callarman note that “...global sourcing and supply has begun a long-term process of leveling the playing field for adding value world wide.” More than likely your small business will look overseas to suppliers who can build what your company needs at a competitive price.
Marketing and Sales
Feller, Shrunk and Callarman noted three components every successful product must offer: product value, service value and a “wow” value. That latter component goes beyond personal care and warranty service to provide an enhanced level of service not generally offered. One current example of a company putting “wow” into practice is the Ritz-Carlton Hotels, whose managers have been empowered to “...to permit every employee to spend up to $2,000 making any single guest satisfied,” according to the Oct. 30, 2009, issue of "Forbes" magazine.
Distribution Management
Where you warehouse and how you distribute your product is a critical link in the value chain. Transportation, material handling, packaging, communications and information systems need to be in place to get the product to your customers. Distribution, or logistics management, remains important in the digital age, as physical locations such as stores and warehouses are still needed. How you employ each distribution point is subject to review and change.
Customer Service
Getting the product to your customers means training your employees to know everything about it, advising customers how to use the product, diagnosing and troubleshooting, and providing friendly service. This final link in the supply chain is refined as needed and is used by senior management to gauge customer behavior.
3)R&D cost, Customer service cost, Production cost, Sales and Marketing expenses,
4) Production cost- inventory cost
Customer service- period cost.
marketing- period cost.
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