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Activity based management (ABM) is a dynamic way of looking at organizations, or
Activity based management (ABM) is a dynamic way of looking at organizations, or of looking at the things that organizations do. When you put on ABM glasses you see action. Organizations are collections of processes. Each process is made up of activities. For this project select a process to analyze. Ideally, this process will come from your current employer (or a former employer), and it will be a process you are familiar with. Examples of processes include: making a sales call. In the top row briefly describes the overall process. Then, use the rows that follow to analyze the activities that comprise the process. The columns identify the relevant attributes for analyzing each activity. The first column briefly describes each activity. The second column identifies each activity as either value-added or non-value-added. There are two ways to define a non-value-added activity: 1) A non-value-added activity can be eliminated and the process can still be completed. In contrast, a value-added activity cannot be eliminated. 2) A non-value-added activity is something that the customer is not willing to pay for. In contrast, a value-added activity is something that the customer is willing to pay for. The third column identifies the level of the activity. Unit-level activities are completed once per unit. Installing wheels on a bicycle is a unit-level activity. Batch-level activities are completed once per batch. Setting up the production line to produce bicycle frames is a batch-level activity. It must be completed once per batch whether the batch is 10 frames or 10,000 frames. Product-level activities are completed once per product. Changing the gearing specifications of a particular bicycle model (an engineering change) is a product-level activity. Facility-level activities are completed once per facility. Preparing the annual production budget for a facility is a facility-level activity. Most activities are unit-level or batch-level. The fourth column identifies the cost driver for each activity. The cost driver for an activity is the one variable or factor that best explains variations in cost for that activity. Remember, you don’t manage costs, instead you manage the underlying factors that drive or determine costs. After you review the table attached that has already been completed using the information above, provide a narrative that complements the table. This narrative provides a more complete explanation of the activities that comprise the process, including how the activities fit together. Use a bold-faced heading for each activity, and use multiple, short paragraphs as you describe each activity. Each activities paragraph should be 200-300 words.

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