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Date: 2024-04-15 Page is: DBtxt003.php L0900-MM-Cost-Price-Value-3a
MANAGEMENT METRICS
COST, PRICE & VALUE [3a]
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VALUE ADDING - v - VALUE DESTRUCTION
VALUE ADD is a powerful driver of business profit.
Production COST lower than PRICE is determinant of PROFIT
VALUE being greater than PRICE is a major incentive towards greater SALES VOLUME
But there are many activities where the COST is greater than the VALUE, in which case there is VALUE DESTRUCTION.
There is a very large segment of the professional and administrative class that engages in various forms of intellectual activity that has a COST greater than the VALUE, and results in VALUE DESTRUCTION.
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