Certified Supply Chain Professional (CSCP) Practice Exam

What are process change costs also known as?

1. Post-transaction costs

2. Pre-transaction costs

3. Operational costs

4. Overhead costs

The correct answer is: Pre-transaction costs

Process change costs are primarily recognized as pre-transaction costs. This terminology refers to expenses that are incurred while preparing for a change within a process before the actual transaction or operational changes take place. These costs may include expenses related to training personnel, redesigning operational processes, and any resources allocated for planning and implementation prior to executing changes. Understanding pre-transaction costs is crucial for organizations as they provide insight into the investment needed before initiating any new system or process. These costs are particularly relevant when evaluating potential return on investment for process improvements or system changes, as organizations need to ensure that they can justify these expenditures with subsequent cost reductions or efficiency gains. In contrast, other types of costs listed do not accurately describe process change costs. Post-transaction costs would refer to expenses incurred after a transaction has taken place, operational costs pertain to the routine expenses involved in running a business, and overhead costs relate to the ongoing expenses that are not directly tied to production or service delivery activities.