Value Analysis Definition
Value analysis is a technique used to identify the best value for money in terms of products and services. It is a systematic approach that looks at all aspects of a purchase, from the initial decision to buy, through to the post-purchase service. Value analysis can be used in both business and personal contexts.
When applied to businesses, value analysis can help to improve profitability by reducing costs and increasing efficiency. It can also be used to assess the performance of suppliers and contractors. In a personal context, value analysis can be used to save money on everyday purchases, or to make sure that you are getting the best possible deal when making major purchases such as a car or a house.
The key principle of value analysis is that you should not simply choose the cheapest option available – instead, you should look at the total cost of ownership (TCO). The TCO takes into account all of the costs associated with a purchase, including the initial price, running costs, maintenance costs, and any expected future costs. By looking at the TCO, you can make sure that you are getting good value for money.
