Question

In: Operations Management

what is the difference between commodity based products and value based products?

what is the difference between commodity based products and value based products?

Solutions

Expert Solution

Difference between commodity-based products and value-based products:

• Both Commodity and value-based products are part of the Manufacturing process.

• The comedies are based on the raw materials which the production takes in to make the product and the value is the finished goods that are out of the production line which has some value attached to it for the consumer on the bias of which the steps would be taken.

• The commodities are based on inputs in the production of goods while the values for the consumers that it would derive are taken as the value of the goods coming out of the same production line.

• No value-added commodity has a different selling price to that of the values added product for which it may have to pay a VAT or value-added tax.

• All commodity thus have no ‘value-added’ and thus is in the same price without any distinction of the producer or the amount been traded which the value-added goods would differ from in price, packaging and even in handling services.


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