It could be defined as a concept that evaluates the use of resources at the disposal of an organization with the view to ensuring that the resources have been properly utilized. VFM frequently makes extensive use of performance indicators in the form of ratios and other statistics to sign post VFM through trends over time, in comparison to two operating units etc. Under this concept, we have three test ways to know if the firms resources have been properly utilized and it includes; 1.ECONOMY:
That the resources have been used with thrift and good housekeeping .i.e. it entails the execution of operation cheaply with unit cost and quality of materials and labor being controlled. According to some management Gurus they also defined VFM as “doing things cheaply under this concept”.
That maximum benefits have been obtained in the use of the resources or alternatively that only the minimum level of energy and work necessary is used for a given level of output i.e. it entails proper execution of operation using best practices which avoid waste and rework. Under this concept, some management Gurus also defined VFM as “Doing things well”
That the output from any given activity is achieving the desired result .i.e. it entails execution of operations such that set objectives are attained. Some management Gurus under this concept defined VRM as “Doing the right things”. CONCEPT OF VFM
This study is aimed at making the maximum impact from the use of your resources, of time, money or what other resources you have at your disposal.
VFM could also be applied in two different sphere, they include; 1.The sphere of Human Endeavour
2.The Office sphere
APPLICATION OF VFM IN HUMAN ENDEAVOUR
1.It utilizes the resources to procure best quality inputs at the cheapest price in the market concerned. 2.It aids individuals to do things right to eliminate waste of scarce resources. 3.It aids individuals do...