Value Standard

Definition

A value standard refers to the worth assigned to a critical function or component, often used to assess its importance and justify expenditures.

Purpose

Value standards are used in value engineering and project management to evaluate the cost-effectiveness of different components and functions. They help in making informed decisions about where to allocate resources for the best return on investment.

Examples of Use

• Construction Projects: Establishing value standards for materials and labor to ensure cost-effective building practices.
• Product Development: Assessing the value of features in a new product to prioritize development efforts.
• Service Delivery: Evaluating the value of different service components to optimize performance and customer satisfaction.

Related Terms

• Cost-Benefit Analysis: A process of comparing the costs and benefits of a decision or project.
• Return on Investment (ROI): A measure of the profitability of an investment.
• Value Engineering: A systematic method to improve the value of a product or project by analyzing its functions.

Notes

Value standards must be regularly reviewed and updated to reflect changes in costs, technology, and market conditions. They are critical for maintaining efficiency and competitiveness.