Value Added is a term used in business to describe the additional value that is created by a company during the production or delivery of a product or service.

It is the difference between the price of the final product or service and the cost of the inputs or raw materials that went into producing it.

Value Added can be created at different stages of the production process, including design, manufacturing, distribution, and sales.

For example, a company that designs and manufactures a new product creates value by transforming raw materials and components into a finished product that is more valuable to customers than the sum of its individual parts.

Value Added is an important concept because it is a measure of a company's economic contribution to society.

Companies that create more value are more likely to be successful and profitable, as they are able to generate a greater return on their investment.

Value Added is also used as a key performance indicator (KPI) for many businesses, as it provides a way to measure the effectiveness and efficiency of the production process.

By identifying the value added at each stage of the production process, companies can identify areas for improvement and implement strategies to increase efficiency, reduce waste, and enhance profitability.

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