ABSTRACT
Value is the relationship of worth to cost in accordance with the customers’ needs and resources for particular situations. The ratio of worth to cost is the principal measure of value for DoD. One of the features of value engineering is the revelation of cost improvement opportunities that might otherwise have remained invisible. As the value engineering program ripens and the opportunities become less obvious, we would use additional criteria to pick our future projects. Cost Improvement Scenario is a case where the total cost of operation was a major consideration. One peculiarity of DoD cost reductions, is that they need not come from the functional analysis, particularly if the contract demands a specific approach. The purpose of variance analysis is to ensure a more profound understanding of the differences between planned and actual performance. Management should use a multimodal approach by considering what is revealed by the variances, the ratios, and the calculated trends.
