What characterizes a value-added activity?

A value-added activity is one that enhances the worth of a product or service from the customer's perspective. This means that it contributes to fulfilling the customer's needs or wants, making the product more desirable and justifying the price the customer pays. Such activities are essential in the context of Six Sigma and continuous improvement, as they focus on maximizing value for the customer while minimizing waste.

In contrast, while decreasing the cost of production can be beneficial, it does not inherently make an activity value-added. Similarly, activities mandated by company policy may not necessarily provide value to the customer; they could be internal processes that do not improve the product or service. Lastly, being unrelated to customer feedback means that the activity does not consider what the customers deem valuable, which is critical in determining whether an activity truly adds value. Therefore, the correct understanding centers around enhancing customer perspective, which aligns with the definition of value-added activities.