image missing Date: 2021-10-17 Page is: DBtxt003.php L0900-MM-Cost-Price-Value-1a


MANAGEMENT METRICS
COST, PRICE & VALUE [1a]
THREE VERY IMPORTANT KEY NUMBERS - ALL DIFFERENT
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(1) COST, PRICE and VALUE are different with clearly different meanings'
(2) COSTS are the resources consumed to make the product
(3) PRICE is a MONEY amount for a TRANSACTION
(4) VALUE is the benefit derived by the consumer
Economic Value Adding
Up to now, the concept of Economic Value Adding does not include quantification of social and environmental impacts.
Many of the very large international companies are very economically efficient and the economic value add is enormous.
Many of these companies avoid accounting for negative impact on society and the environment.

Value Destruction
Almost all the organizations that are not in the 'for profit corporate sector' are economically inefficient and the net result is mainly value destruction.


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