image missing
HOME SN-BRIEFS SYSTEM
OVERVIEW 		EFFECTIVE
MANAGEMENT 		PROGRESS
PERFORMANCE 		PROBLEMS
POSSIBILITIES 		STATE
CAPITALS 		FLOW
ACTIVITIES 		FLOW
ACTORS 		PETER
BURGESS
SiteNav SitNav (0) SitNav (1) SitNav (2) SitNav (3) SitNav (4) SitNav (5) SitNav (6) SitNav (7) SitNav (8)
Date: 2024-11-22 Page is: DBtxt001.php txt2003032100

TVM Value Accountancy
PUTTING ACCOUNTANCY TO WORK FOR ALL OF SOCIETY
Metrics about Progress and Performance in the Economy and Society
Metrics that Measure Impact on People, Place and Planet
The Core of TrueValueMetrics
Chapter 3 - ANALYTICAL FOCUS
3-21 ANALYSIS OF VALUE CHAIN

VALUE CHAIN ANALYSIS

Value chain

The value chain has been a critical factor in organizing development, production and marketing around the globe. The value chain has been structured to maximize profit for the involved organizations with little regard to the optimization of community value. The results have been predictable with favorable profit optimization largely offset by value destruction for society.

Transfer prices

Prices are critical in economic analysis and the determination of profit and value to any entity. Transfer pricing is used to put a value on goods and services as they move from one sub-entity to another within an organization, or between controlled entities. They are a tool that can be used to move profit between entities and may have inappropriate consequences.

Transfer pricing is a central component of value chain analysis ... but it is not easy to get right. Ford was one of the first companies to have a vertically integrated production organization, but transfer pricing caused all sorts of problems. Was it the steel mills or the engine plant that was making money for the company? Big questions, with no easy definitive answers.

The value chain adds a level of complexity to cost analysis and understanding the behavior of costs.


The text being discussed is available at
SITE COUNT<
Amazing and shiny stats
Blog Counters Reset to zero January 20, 2015 		TrueValueMetrics (TVM) is an Open Source / Open Knowledge initiative. It has been funded by family and friends. TVM is a 'big idea' that has the potential to be a game changer. The goal is for it to remain an open access initiative.
WE WANT TO MAINTAIN AN OPEN KNOWLEDGE MODEL
A MODEST DONATION WILL HELP MAKE THAT HAPPEN
The information on this website may only be used for socio-enviro-economic performance analysis, education and limited low profit purposes
Copyright © 2005-2021 Peter Burgess. All rights reserved.