Value Analysis

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Birth Second World War (Lawrence D) Cost reduction technique. Organised creative approach.

What is Value
The minimum money which has to be expended in purchasing or manufacturing a product to create the appropriate use of esteem factors.

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Use of functional Value. Esteem Value. Cost Value. Exchange Value.

Division Of Value

Value analysis
A

task of finding more economical way of making or buying a product

systematic organized approach for attaining the same performance at lower cost

Advantages of Value Analysis

It leads to improvements in product design so that, most appropriate products are produced . High quality (value) is maintained. All-round efficiency is achieved by eliminating waste of various types. Cost savings provide a measure for judging managerial effectiveness. New ideas are generated and incorporated. Teams spirit and morale are improved. Areas requiring attention and improvement are pin pointed.

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Procedure of Value is no standard approach orAnalysis procedure

Ascertaining

the needs and wants of customers. Specifying the function of products and components. Determining the appropriate cost of desired performance. Identifying better alternatives in terms of works procedures.

Implementation of Value Analysis Identifying the function:Primary. Secondary.

Evaluation of the function by comparison

: Basic question does the function accomplish reliability at the best cost

Develop Alternatives.

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Value Analysis Steps Gather Information.

Measure Performance. Analyse Functions. Generate Ideas. Evaluate and Rank Ideas. Develop and Expand Ideas. Present Ideas.

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Value Engineering
Value

engineering is a total of management which approaches the question of saving cost from the point of view of value. Requires co-operation of all functional departments. In large organisations, there are value engineering teams having full time jobs.

Value Engineering Value and cost

Value = Function Cost Value: What the product is worth to the customer. Function: Properties and qualities of product. Cost: Money value of materials used, Labour & indirect costs.

Value Engineering Suggestion schemes

Suggestion scheme facilitates the work of value engineering team. The scheme helps in the changes of value engineering and makes it implementation easier.

Value Engineering
Requirement of a product Use. Esteem.

It is essential to be considered how much to be added in order to sell the part. The reasonable price of a product can be obtained by comparing with a comparative product.

Original Phase

Information Phase

Innovation Phase

Evaluation Phase

Choice Phase

Implementation Phase

Review Phase