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Q. Explain Activity based management?
Activity based management (ABM) is about satisfying customers whilst making fewer demands on internal resources. The aim is that once cost drivers are created, organisations can aim to reduce cost, by creating models for more effective planning and control. ABM can lead towards the elimination or reduction of non-value added activities e.g. customer returns, complaints and obsolesce of stock. By eliminating activities which don't add value to customers, an organisation may still satisfy customers and at the same time make fewer demands on organisations resources.
Ray's Satellite Emporium wishes to verify the best order size of their best selling satellite dish (model TS111). Ray has estimated the yearly demand for this model at 1,000 units
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EIGHT STAGE PROCESS
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