In value engineering, the term value refers to

Explanation:

Value Engineering:

• Value engineering is a systematic and organized approach aimed at improving the value of a product, process, or service. It involves analyzing the functions of a product or process to ensure that the essential functions are achieved at the lowest possible cost without compromising quality, performance, or reliability. The ultimate goal of value engineering is to maximize the value-to-cost ratio.

Value:

• In value engineering, the term "value" refers to the ratio of the function of a product to its cost. It is the utility or worth of the product in terms of fulfilling its intended purpose relative to the cost incurred in its production. The formula for value can be expressed as:

Value = Function ÷ Cost

Here, the function represents the utility or purpose of the product, while the cost encompasses all the expenses associated with the production, including materials, labor, overheads, and other related costs.

Utility of the product

• The term "value" in value engineering is directly related to the utility or functionality of the product. It signifies the product's ability to perform its intended function effectively while minimizing costs. The focus in value engineering is on enhancing the utility of the product or service while ensuring cost-effectiveness. For example, if a product can perform its function satisfactorily but is redesigned to reduce production costs without compromising performance, its value is increased.