Go to www.YouTube.com and search for How It\'s Made, a television show produced

Question

Go to www.YouTube.com and search for How It's Made, a television show produced by the Discovery Channel that shows how thousands of products and services are created. Search for a product that provides a form of transportation, such as an automobile, ATV, bus, helicopter, or amphibious vehicle.

Required:

Watch the video and answer the following questions:

1. What product did you choose? Briefly describe how the product is made.

2. Provide an example of the following activities that would be performed by the company that creates this product:

- Unit-level activity

- Batch-level activity

- Product-level activity

- Facility-level activity

3. Provide an example of the following activities that would be performed by the company that creates this product:

- Value-added activity

- Non-value-added activity

4. Would the company that makes this product benefit from ABC? Why or why not?

Explanation / Answer

Solution:

1. What product did you choose? Briefly describe how the product is made.

I saw the video on making of lipstick. The product involves three main ingredients that is oil, mositurizer and wax. But the exact receipe differs from company to company. The first step is mixing of the above three main ingredients in a proper proportion. Then the colour is passed through rollers and the thick portion formed in the end is dropped in the earlier main ingredients mix. The lipstick is then formed then poured in a lipstick mould and then the lipstick in the mould is passed through the cooling machine so that it gets in a proper state and oonly after that cases of lipstick are kept on the top of the mould and lipstick filled in the case. The last stage is the inspection of the lipstick from every batch so as to ensure that its in proper form and even the lipstick colour is tested against the standard lipstick colour. The lipsticks are then capped for sale.

2. Provide an example of the following activities that would be performed by the company that creates this product:

- Unit-level activity

The mixing of the main ingredients (that is oil, mositurizer and wax) in a mixture is done by one unit

- Batch-level activity

Each lipstick from one batch is tested by the inspection department

- Product-level activity

The lipstick is tested against the standard lipstick

- Facility-level activity

The lipsicks are then capped once tested and approved

3. Provide an example of the following activities that would be performed by the company that creates this product:

- Value-added activity

The using of wide cap so that the lipstick doesnt gets smudged in the lipstick container

- Non-value-added activity

The lipstick is tested against the standard lipstick

4. Would the company that makes this product benefit from ABC? Why or why not?

Yes, it would definately benefit from ABC as it involves various departments, stages and process. The proper allocation of cost as per activity would help to judge the performance of the department, unit or stage.

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