Value Analysis and Value Engineering

Good Essays
VALUE ANALYSIS & VALUE ENGINEERING
Value Analysis is an effective tool for cost reduction and the results accomplished are far greater. It improves the effectiveness of work that has been conventionally performed as it questions and probes into the very purpose, design, method of manufacture, etc., of the product with a view to pinpointing unnecessary costs, obvious and hidden which can be eliminated without adversely affecting quality, efficiency, safety and other customer features.

VALUE AND VALUE ANALYSIS
Let us consider at this stage what is meant by “Value’. ‘Value’ is itself is some what difficult to define. It means different things to different people. Also, it is often confused with the cost and price of a product or service. One way of defining the value of an item is: Worth to you Value = -----------------Price you pay This means that if you feel that you have your money’s worth, then you have received 100 per cent value. Which indicates that ‘Value’ has a subjective aspect, for what is good value for one person need not necessarily be so far another. In general, if for any function or a product or a service, you feel you are paying too much, or it costs you more than you think it should, there is scope for improving its ‘value’ into it. This leads us on to another useful way of looking at ‘value’. Value is the least cost that can accomplish reliably a function or a service. This implies that in achieving reduced cost, the quality and performance of the item are maintained. It follows, therefore, that value analysis is a technique which builds “Value’ into an item. Value can also be defined as that combination of quality, efficiency price, and service which ensures the ultimate economy and satisfaction of the purchaser. Value Analysis can be understood as a technique which helps everyone to determine this combination. It can be seen, therefore, that several components make up ‘Value’. There is value arising from the function or end use of an item,

You May Also Find These Documents Helpful

  • Satisfactory Essays

    TLMT 313 Quiz 2

    • 733 Words
    • 6 Pages

    Value engineering is a systematic study of every element of cost in a material, item of equipment, service or construction project that is conducted by design engineering only.…

    • 733 Words
    • 6 Pages
    Satisfactory Essays
  • Better Essays

    The valuation principle is an analysis between the value of the benefits and the value of its costs. It is the foundation of financial decision making and it provides a basis for making decisions within a company. Understanding the valuation principle is very useful in assisting a financial manager in the company’s overall well being. The valuation principle also utilizes the market prices as well. “The value of a commodity or an asset to the firm or its investors is determined by its competitive market price. The benefits and costs of a decision should be evaluated using those market prices. When the value of the benefits exceeds the value of the costs, the decision will increase the market value of the firm.” (SU3finance)…

    • 855 Words
    • 4 Pages
    Better Essays
  • Satisfactory Essays

    Gms 401 Chapter 1

    • 460 Words
    • 2 Pages

    Value added – the difference between the cost of inputs and the value of the price output…

    • 460 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Social Sciences Tma2

    • 1284 Words
    • 6 Pages

    It appears simple but the term value is in fact quite a complex term. Value means how useful something is. An item has a value because it is valued by people who use them. If an item is regarded to as rubbish it is mainly because people disvalued them, and not necessarily because it has lost its value and not because it is in itself worthless. If an item is rubbish for one person, it can still be useful to someone else. There are a number of uses for the word value. Value is something that is useful or it add value overtime. Something that interest people.…

    • 1284 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    Edf Energy

    • 1116 Words
    • 5 Pages

    Before i go further let me touch on a brief introduction on customer value, customer value can be defined as the difference between what a customer gets from a product and what he or she has to give in order to get it.…

    • 1116 Words
    • 5 Pages
    Powerful Essays
  • Good Essays

    Value Management

    • 637 Words
    • 3 Pages

    Q.1 Using your emerging knowledge of Value Management (VM), critically appraise the report and make suggestions as to how the VM study might have been run differently / more effectively.…

    • 637 Words
    • 3 Pages
    Good Essays
  • Good Essays

    developing critical thinking

    • 2656 Words
    • 11 Pages

    To me a value is a principle, a standard or even certain qualities that individuals, people or even groups hold. These values/principles are one of if not the most important things. These values/principles help to guide us a people and individuals. By guide I mean how we live our lives, what we base our decisions on. A Value is usually produced via a belief. This belief would normally be related to worth of an idea or a particular type of behaviour. For example I see great value in always being polite, however somebody that has always got what they wanted or have had a different up bringing may not place very little or any value on being polite. These values can influence our decision making and often the support we give our clients. In a work or professional environment as individuals we should ensure that we do not try to influence our customers decisions based on our values.…

    • 2656 Words
    • 11 Pages
    Good Essays
  • Good Essays

    Traditionally when discussing value we refer to the economic systems three variables; Exchange value, utility value, and intrinsic value. In simplistic terms, this is basically the value of the object, what the object is used for and the personal experience gained from…

    • 480 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Essay 1

    • 3780 Words
    • 12 Pages

    Because of the continuing requirements for maintaining downward pressures on all costs, it has been found productive to establish and maintain a small department within Engineering whose only purpose is to concentrate on the broadest areas of cost reduction through the Value Engineering/Value Analysis approach. This department is made up of experts in each of the disciplines required to develop and manufacture the products of the supplier company. Personnel were selected for their demonstrated skills in the areas of product development, manufacturing, tooling, and processing as well as their overall industry experience. In many organizations, it would be difficult to take people with these skills out…

    • 3780 Words
    • 12 Pages
    Powerful Essays
  • Satisfactory Essays

    Value Engineering

    • 575 Words
    • 3 Pages

    Following are the phases to be carried out in value engineering job plan. 1) Orientation phase 2) Information phase 3) Function analysis 4) Creation phase 5) Evaluation phase 6) Investigation phase 7) Implementation phase…

    • 575 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    ECN 204 Notes

    • 6284 Words
    • 26 Pages

    -Value added: The value of the product sold by a firm less the value of the inputs the firm purchased from other companies.…

    • 6284 Words
    • 26 Pages
    Good Essays
  • Good Essays

    In the valuation process the problem is identified, the work necessary to solve the problem is planned and relevant data is collected, verified and analyzed to form an opinion of value. The valuation process is accomplished by following specific steps, the number of which depends on the nature of the valuation assignment and the data available to complete it. In all cases, the valuation process provides the model to be followed in performing market research and data analysis, in applying valuation techniques and in integrating the results of these analytic activities into an opinion of value (W. Madison St,…

    • 928 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Value Engineering

    • 1074 Words
    • 5 Pages

    | |“Value Management is a proactive, creative problem-solving process which can be understood by all.” Value from |…

    • 1074 Words
    • 5 Pages
    Powerful Essays
  • Good Essays

    Value Analysis

    • 778 Words
    • 4 Pages

    * Value Analysis is a step by step approach to identify the function of a product, process, system or service;…

    • 778 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Industrial Robots

    • 1788 Words
    • 8 Pages

    The customer or the end user of the product should receive the greatest value of the product which can be achieved by conducting tests such as activity analysis, value analysis and evaluation and planning. This seems to be missing in this article. A benefit of a value chain analysis is that it would help make decision quicker and allow the company to produce a quality service or product. In most cases, the more value you create, the more people will be prepared to pay a good price for your product or service, and the more they will keep on buying from you. On a personal level, if you add a lot of value to your team, you will excel in what you do. You should then expect to be rewarded in line with your contribution.…

    • 1788 Words
    • 8 Pages
    Powerful Essays