value analysis


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INTRODUCTION Value analysis aims at a systematic identification and elimination of unnecessary costs resulting in the increased use of alternatives, less expensive material, cheap designs, less costly methods of manufacturing .. To provide the same performance, quality and efficiency and in a decrease of overall unit cost and consequently greater profits.

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The function is the part, or material, or service is the job it does. Value is the price we pay for a product process, material or service required to perform a specific function in a efficient way. The value analysis is to ensure that all the elements of cost whether for labour, for material, for designing or for services, contributes proportionately to the function.

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Value analysis a cost reduction technique and perhaps the most potent of all such techniques. Cost reduction is a very dynamic concept unlike, for example, cost control.

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AIM: To keep cost within predetermined standards


COST REDUCTION Objective is to attack the costs themselves and eliminate them where possible. Value analysis parses a product into the functions performed by different components and then looks for the cheapest way to have that function performed.


DEFINITION “VALUE ANALYSIS is an organized procedure for efficient identification of unnecessary cost”. “Value analysis is the study of the relationship of design, function and cost of any product, material or manufactured by more efficient process, change in source of supply (external or internal), or possible elimination or incorporation in a related item.”

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Value ANALYSIS is organized and systematic study of every element of cost in a part, material or service to make certain it fulfils its function at the lowest possible cost; it employs techniques which identify the function the user want from product or service; it establishes by comparison the appropriate cost for each function; then it cause the required knowledge, creativity and initiative to be used to provide each function for lower cost”.

historical : 

historical perspective

Economic Value : 

Economic Value 1> use value 2>esteem 3>cost value 4>exchange value

Mathematical formula : 

Mathematical formula function Value=----------------------------- Cost

increase Value &decrease cost : 

increase Value &decrease cost 1)when we reduce cost. 2)when we improve function. 3)By (1) and(2) together. 4)when we increase function by a disproportionately low increase in costs.

Types of the function : 

Types of the function (a) Basic Functions: the primary purposes of a product. (b) Secondary Functions: Other purposes not directly contributing to the primary purpose but supporting it or resulting from a specific design approach.

Value tests and : 

Value tests and Value areas