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# Important Questions and Answers: Value Engineering

Mechanical - Engineering Economics & Cost Analysis - Value Engineering

VALUE ENGINEERING

12. What do you mean by `Make or Buy Decisions?

ü Make or buy decision is a determination whether to produce a component part internally or to buy it from an outside supplier.

ü The Organization should evaluate the costs and benefits of manufacturing a product or product component against purchasing it and then select the alternative which results in the lower cost.

13.  What are the different approaches followed in make or buy decision?

The following are the approaches followed in make or buy decision.

ü Simple cost analysis

ü Economic analysis

ü Break-even analysis

14.    What is mean by value analysis/value engineering?

ü Value analysis is a special type of cost reduction technique.

ü It critically investigates and analyses the different aspects of materials, design, cost and production of each and every component of the product in produce it economically without decreasing its utility, function or reliability.

15.    What do you mean by value of a product?

Value differs from both price and cost in the sense that it is the cost proportionate to the function. We can express value mathematically as Value =function or utility/ cost 16. Explain `function’.

Function specifies the purpose of the product or what the product does, what is its utility etc.

17.            What are the different types of values?

ü Cost value

ü Exchange value

ü Use value

ü Esteem value

18.            What are the various functions of a product?

Functions can be classified into the following three categories:

ü Primary functions

ü Secondary functions

ü Tertiary functions

19.            Write any four objectives of value analysis.

ü  Reduce the cost of the product

ü  Simplify the product

ü  Use (new) cheaper and better materials

ü  Modify and improve product design so as to make it acceptable to consumer

20.            List any four advantage of value engineering.

ü Value engineering/analysis identifies and reduces the product cost.

ü It modifies and improve the product design

ü It increases the performance/utility of the product by economical means.

ü It helps to generate new ideas.

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Mechanical : Engineering Economics & Cost Analysis : Value Engineering : Important Questions and Answers: Value Engineering |