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1. What is the difference between value analysis and value engineering?
2. What is the internal and functional benchmarking?
3. Could you please explain why capacity ratio x efficiency ratio = activity ratio?
Thank you so much as always
1. Value analysis is concerned with existing products – analysing with a view to reducing costs or improving the product. Value engineering is more concerned with new products – designing them in such a ways as to reduce costs or improve.
2. Functional benchmarking is the comparison of processes or operations against like processes or operations in similar industries. Internal benchmarking is the comparison of processes or operations within an organization.
3. As an example, a firm can produce more in two ways – either by getting more labour (capacity) or by working faster (efficiency).
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