Value Added Activities
value-added activities are those activities an remain in business. Value-added activities contribute to customer value and/or help meet and organization's need. Activities that comply with legal mandates are value-added because they exist to meet organizational needs. Moreover, they add to customer value by allowing the business to continue operating so that the a desired by the customer can be obtained. Even though mandated as poss to red sary, customers should insist that they be performed as efficiently incl cost impact on goods and services. Examples of mandated activities needed to comply with the reporting requirements of the SEC and the filing requirement of the IRS. The remaining activities in the firm are discretionary. Classifying discretionary value-addedd is more of and art than a science and depends h if subjective judgment. It is possible, however, to identify three conditions that, if simultaneously met, are sufficient to classify a discretionary activity as value-added These conditions are as follows: (1) the activity produces a change of state (2) the change of state was not achievable by preceding activities, and (3) the activity enables other activities to be performed