ITPEC IP April 2026 Question 79
Which of the following is a technique that analyzes the value of a product or service through the relationship between functionality and cost, and enhances that value through reduction in cost and improvement in functionality and quality?
Explanation
Value engineering — it analyzes value as the relationship between function and cost, and raises value by cutting cost and improving function.
Value engineering (VE) expresses value as function divided by cost. It asks what functions the product or service must provide and at what cost, then raises value by lowering cost while keeping the function, raising function and quality at the same cost, or both. The cost is considered over the whole life cycle.
Answer (c)
Why not others:
- •(a) Supply chain management — optimizes the flow of goods from suppliers to customers across companies; it does not analyze function against cost
- •(b) Knowledge management — shares and reuses the know-how of employees across the organization
- •(d) Reverse engineering — analyzes an existing product or program to work out its design and specifications
Key rule: Value = function ÷ cost; VE raises it from either side, never by cutting a required function.
Business Strategy Management · AI-written, may contain errors
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