Page 140 - DMGT525_MATERIALS_MANAGEMENT

Dilfraz Singh, Lovely Professional University
Unit 10: Value Analysis

Unit 10: Value Analysis Notes

CONTENTS
Objectives
Introduction

10.1 Concept of Value and Value Analysis
10.1.1 Value
10.1.2 Value Analysis

10.2 Value Analysis Method
10.3 Value Analysis Process
10.4 Function Analysis System Technique
10.4.1 Creating a FAST Model
10.5 Application of Value Analysis

10.6 Organization for Value Analysis
10.7 Summary
10.8 Keywords

10.9 Review Questions
10.10 Further Readings

Objectives

After studying this unit, you will be able to:
 Explain the concept of Value Analysis

 Discuss Value Analysis Method
 Explain the Process of Value Analysis
 Discuss the Function Analysis System Technique (FAST)

 Describe the Application of Value Analysis
 Discuss Organization of Value Analysis
Introduction

In the previous unit, we dealt with inventory control system and its elements. The unit also
discussed about the procedure for setting up an efficient inventory control system. This unit will
help you to understand the concept of Value Analysis. The various section and sub section of this
unit will also summarize the process of value analysis and Function Analysis System Technique.
The idea behind Value Analysis is not new. The approach to the problem essentially differs from
that of the other Cost Reduction techniques. A customer when buying a product weighs its
functional and other features (appearance, attractiveness, get-up) against its price and judges the
value of the product. Manufacturer in turn, in order to enhance the value of his products must
ensure that he offers all the necessary functional features at the lowest possible price. This
functional approach is the basic criteria of value analysis.

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