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

Please like the answer if it helped you.

a)

The product I choose is the manufacturing of elevators. The product is made using number of techniques and methods. Most of the production takes place is batches, like the body, electronic parts etc. The end parts are then assembled to give form of the final elevators.

B)

Unitlevel activities: Direct labor and material used to manufacture it as well as machine maintenance are examples of unitlevel activities.

Batchlevel activities are purchase orders for ordering elevator component parts from suppliers, machine setup, batch quality tests etc.

Productline activities are product design for elevator and its parts, warehousing and storage costs for each product line as well as engineering changes in assembly line for changing to new type of elevators.

    Facility support activities are plant security, food for workers, cleaning, insurance, plant maintenance, HR etc.

C)

Manufacturing, product design improvement and maintenance are value added activities.

Inspection of the manufactured products, security of the plant etc are not value added activites.

d)

Yes the company will benefit from ABC by assigning the cost based on the activites.

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