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What is Value

The minimum money which has to beexpended in purchasing or manufacturing aproduct to create the appropriate use of

esteem factors.

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Division Of Value1. Use of functional Value.

2. Esteem Value.

3. Cost Value.

4. Exchange Value.

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Value analysisA task of finding more economical way of making

or buying a product

A systematic organized approach for attaining thesame performance at lower cost

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Advantages of Value Analysis

It leads to improvements in product design so that, mostappropriate products are produced .

High quality (value) is maintained.

All-round efficiency is achieved by eliminating waste ofvarious types.

Cost savings provide a measure for judging managerialeffectiveness.

New ideas are generated and incorporated.

Teams spirit and morale are improved.

Areas requiring attention and improvement are pinpointed.

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Procedure of Value Analysis There is no standard approach or 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.

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Implementation of Value

AnalysisIdentifying 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 Steps1. Gather Information.

2. Measure Performance.

3. Analyse Functions.

4. Generate Ideas.

5. Evaluate and Rank Ideas.

6. Develop and Expand Ideas.

7.

Present Ideas.

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Value Engineering

Value engineering is a total ofmanagement which approaches the

question of saving cost from the point ofview of ‘value’. 

Requires co-operation of all functionaldepartments.

In large organisations, there are valueengineering teams having full time jobs.

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Value EngineeringValue 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.

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Value EngineeringSuggestion schemes

Suggestion scheme facilitates the work of valueengineering team.

The scheme helps in the changes of valueengineering and makes it implementation easier.

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Value Engineering

Requirement of a product

Use.

Esteem.

It is essential to be considered howmuch to be added in order to sell the part.

The reasonable price of a productcan be obtained by comparing with acomparative product.

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Original

Phase

Information

Phase

Innovation

Phase

Evaluation

Phase

Choice

Phase

Implementation

Phase

Review

Phase