CPIM Practice Exam

What is true regarding the concept of value from the customer's perspective?

1. Cost buildup and storage add value to a product.

2. Value starts with the customer.

3. Cost and value are synonyms.

4. Lean manufacturing means always having product ready for customer.

The correct answer is: Value starts with the customer.

The statement indicating that value starts with the customer is accurate because it highlights the fundamental principle in business that value is determined by what the customer perceives as beneficial or worthwhile. From a customer's perspective, value is not merely about the features of a product or service; it's about how well it meets their needs and expectations. This perspective underscores the importance of understanding customer preferences and tailoring products or services accordingly to enhance satisfaction and loyalty. While the other options address different aspects of business and manufacturing, they do not capture the essence of how value is defined through the lens of the customer. For instance, while cost buildup and storage can affect the overall cost of a product, they do not inherently add value from the customer's viewpoint. Similarly, equating cost with value overlooks the broader context that value entails not just cost but also quality, functionality, and service. Lastly, the concept of lean manufacturing emphasizes efficiency and resource optimization, but it does not dictate that products are always ready for customer demand; rather, it focuses on responding to customer needs in a timely manner without excess inventory.