accounts, code of -  1. A set of numbers used to categorize major components of the whole product or components of general company overhead, 2. A set of numbers used in estimating to group costs, 3. In construction, a hierarchical set of numbers used to represent the whole project [e.g., the 16 Division CSI set or the 12 System UNIFORMAT set].

alternative, function -  A different method or way [in terms of a product] to achieve the result desired.

analysis, function  -  1. The study of product performance using two words, a verb and a noun, 2. The methodology of value analysis.

analysis, functional  -  A mathematical technique originated by Vito Volterra in 1887 involving the use of integro-differential equations.

analysis, future value  -  An economic technique to accumulate costs occurring at various points in time to their equivalent value at a specified future point in time.

analysis, life cycle cost  -  The comparison of acceptable alternatives on the basis of their life cycle costs using present value or annualized cost methodology.

analysis, present value  -  An economic technique to discount costs occurring in future years to their equivalent current value and sum them.

analysis, value  -  1. A method for enhancing product value by improving the relationship of worth to cost through the study of function, *2. A specific application of value methodology performed to analyze existing products using an organized approach [job plan] with an organized effort [multidiscipline team] to provide required functions at lowest overall cost consistent with achieving required acceptance or performance, 3. The determination of the value of product functions as perceived by the customer in the marketplace.

*analyst, value  -  One who uses value methodology to study a product and search for value improvement.

*assurance, value  -  See value methodology.

benefit, function  -  The life cycle advantages, income, or revenue attributable to provision of a function.

characteristics, essential  -  The minimal or necessary operational, maintenance, safety, performance, and reliability needs of the customer which must be fulfilled.

*control, value  -  See value methodology.

cost, acquisition  -  The price paid to procure a product not produced in-house.

cost, annualized  -  An economic technique to convert any defined set of present value life cycle costs to an equivalent uniform annual amount for a fixed period.

cost, application  -  See customer cost.

cost, breakeven  -  1. The cost, for a given quantity of product, where the cost to purchase the product is the same as the cost to manufacture it in-house, 2. The quantity at which two competing acquisition alternatives are equal in cost.

cost, conversion  -  The money expended to convert raw material, or an unfinished product, into the desired usable end product.

cost, customer  -  Product price of acquisition paid by a customer.

cost, development  -  1. The amount spent on product research, design, models, pilot production, testing, and evaluation, 2. Cost normally considered product overhead and distributed as fixed cost over the number of products to be produced.

cost, differential  -  The difference in the life cycle cost between two competing alternatives.

cost, direct  -  1. Cost that is directly identifiable with and attributable to the production of one specific product, 2. Cost that cannot be allocated to more than one product.

cost, direct labor  -  The amount expended for salaries and wages to provide a product.

cost, essential  -  All cost necessary to provide basic function.

cost, factory  -  See manufacturing cost.

cost, fixed  -  1. Cost incurred that is not dependent upon the quantity of products produced, 2. Costs that do not vary with the volume of business, such as property taxes, insurance, depreciation, security and basic water and utility fees, 3. Expenses for labor, material, equipment, and tools to produce the first product.

cost, function  -  1. The proportion of product cost allocated to functions performed by the product, 2. All costs directly associated with the performance of a particular function, 3. Costs required for the realization of a function.

cost, general & administrative  -  A special classification of overhead cost normally apportioned to products and includes salaries for executives, managers, administrative and clerical staff as well as general office supplies and equipment, marketing and as specified may include advanced design, and research and other administrative costs.

cost, incremental  -  1. The difference in product cost between established incremental levels of product performance, 2. The add-on, alternative, accessory or choice cost which takes into account the availability of existing resources when adding a new system, 3. Also referred to as variance cost.

cost, indirect  -  1. See overhead cost, 2. Also called indirect burden.

cost, indirect labor  -  The amount expended for employee benefits, i.e.; retirement, health insurance, vacation, other leave, unemployment compensation and bonuses.

cost, investment  -  The initial costs of product development, excluding sunk costs, which are assumed to occur as a lump sum in a base year.

cost, labor  -  The sum of direct labor cost and indirect labor cost.

cost, life cycle  -  1. The sum of all acquisition, operation, maintenance, use and disposal costs for a product over a specified period of time, 2. The sum of all costs for the development, procurement, production and installation of a product, as well as for its financing, taxes, operation, logistic support, maintenance, modification, repair, replacement and disposal over its useful life, 3. In manufacturing it is also referred to as the sum of development, production and application cost, 4. The economic measure of value.

cost, logistic support  -  1. The cost of spare and replacement parts and equipment with associated installation labor, 2. The cost of periodic maintenance and repair, 3. The cost for those activities necessary to plan for and provide support programs, such as logistics, field engineering, publications, supply support, spares, training, administration of logistic functions, and repair coordination, 4. In the military, the cost for details embracing the transport, quartering, and supply of troops.

cost, lowest total  -  The lowest life cycle cost.

cost, manufacturing  -  The sum of the costs expended for direct material, direct labor, and factory overhead costs for a product.

cost, material  -  1. The amount expended for raw or purchased materials to provide a product, 2. Normally includes the cost for packaging, shipping and delivery of purchased materials.

cost, nonrecurring  -  1. Items of cost that represent one time expense at predicted times in the future, 2. Normally includes the cost for packaging, inspection, shipping and delivery of purchased materials.

cost, overhead  -  1. Costs apportioned to products from overhead accounts, 2. Costs which cannot be specifically and directly charged to a single product as being solely incurred by that product such as development, supervision, tooling, maintenance, heat, power, light, buildings, taxes, and financing, 4. Usually fixed costs, 5. Also called indirect costs or burden.

cost, ownership  -  1. The cost to acquire, operate, maintain, repair and dispose of the product during its period of use, 2. The cost to possess the product including all finance charges, taxes, insurance, and loss of product use when out of service. cost, product  -  1. The sum of manufacturing, general and administrative, and selling costs, 2. The expense to acquire a product, 3. The transfer of money, labor, time, or other personal items to achieve an objective, 4. One component of price.

cost, production  -  See manufacturing cost.

cost, recurring  -  1. Repetitive production costs that vary or occur with the quantity being produced, 2. Cost expressed in terms of a recurring direct unit cost for production of an item consisting of labor, direct burden, materials, purchased parts, expendable tooling, quality control, test, inspection, packaging, and shipping, 3. Costs which are repetitive throughout a product's useful life.

cost, relative  -  1. Differential costs between various products or functions rather than actual or absolute costs, 2. Costs which show order of magnitude only and the order of expense from greatest to least.

cost, replacement  -  Future costs to replace a product or product component which is expected to occur during the product life.

cost, retrofit  -  The cost to incorporate a product improvement or necessary change into an older product.

cost, standard  -  1. Cost calculated on accepted productivity and material rates used as a norm against which to compare actual performance, 2. Costs accepted as the basis for budgeting or allocation of funds.

cost, supplier  -  1. The price a manufacturer pays for generally "off-the-shelf" purchased parts, materials and supplies as contrasted with "sub-contractor costs" that generally do some degree of product manufacturing.

cost, total  -  1. All cost for someone to acquire, use, enjoy, maintain, and dispose of a product, plus the time, effort, and risk of buying, 2. See life cycle cost.

cost, unnecessary  -  1. Costs for functions not desired, 2. Cost for quality or performance above that needed by the user, 3. Any cost which does not contribute to value, 4. That portion of the cost of a product that does not contribute to essential functions, required performance, or marketability.

cost, variable  -  Direct or indirect costs that change directly with the quantity of, or conditions under which, products are produced, as distinguished from fixed costs.

cost, variance  -  See incremental cost.

cost, vendor  -  See supplier cost.

dollars, constant  -  Economic value expressed in terms of the purchasing power of the dollar in the base year; i.e., both inflation of cost and the time value of money are reflected through use of a discount rate.

dollars, current  -  Economic value expressed in terms of actual prices each year, including inflation; i.e., present or future value of current dollars is determined by using the time value of money rather than a discount rate.

*engineer, value  -  One who uses value methodology to study a product and search for value improvement.

engineering, value  -  1. The same as value analysis except with emphasis on application during product development and/or design, 2. The incorporation of functions into products considered of value by the user, *3. A specific application of value methodology.

estimate, cost  -  1. A product representing the art and science of predicting cost or price, 2. The summation of unit quantities of labor and material multiplied by unit costs of labor, material, overhead and profit for providing a product under a specified set of conditions.

factor, discount  -  A multiplication number for converting cost and benefits occurring at different times to a common basis.

*FAST, customer  -  The same logic as a technical FAST diagram except that four supporting functions always appear immediately below the basic function(s) [i.e.: assure dependability, assure convenience, satisfy user or enhance product, attract user or please senses].

FAST, technical  -  1. A diagramming technique to graphically show the logical relationships of the functions of a product, 2. Product functions displayed horizontally in diagram form using the following rules: higher order functions appear to the left answering "why" a function occurs; lower order functions appear to the right answering "how" a function occurs; functions occurring at the same time appear vertically below one another; scope lines indicating the scope of the value study are placed vertically; and basic function of the product is defined as being immediately to the right of the left scope line.

function, aesthetic  -  1. A function describing esteem value rather than use value, 2. Functions attributable to please user rather than contributing performance, 3. A function that indicates product features that exceeds its technical utility or performance requirement, 3. Also referred to as esteem function.

function, basic  -  1. That which is essential to the performance of a user function, 2. The function describing the primary utilitarian characteristic of a product to fulfill a user requirement, 3. Also called primary or essential function.

function, critical  -  A combination of the basic and selected required secondary or dependent functions defining the means used to achieve the workability of the product.

function, critical path  -  One of the set of basic and dependent functions that meet the "how" and "why" logic on a FAST diagram forming a path of essential functions without which the product would not perform.

function, dependent  -  1. Lower order functions, to the right of each other on a FAST diagram, that are successively dependent on the one to its immediate left for its existence, 2. A function that depends on a higher order function for its existence, 3. A function which exists or is chosen in order to achieve a basic function.

function, essential  -  1. A function describing a characteristic that is absolutely necessary to a product's ability to perform the user function, 2. Also referred to as necessary or required function.

function, esteem  -  See aesthetic function.

function, higher order  -  1. A function which is a goal rather than an objective, or an objective rather than a task, 2. A functions that is more abstract than specific [i.e.; "feed people" is a higher order function than "distribute food stamps"].

function, independent  -  1. A function that does not depend on another function or on the method selected to perform that function, 2. A function that occurs "all the time," [i.e.; a part or assembly may have to "resist corrosion" regardless of what other basic or secondary function that part is performing].

function, lower order  -  The opposite of a higher order function [tasks rather than objectives, specific rather than abstract].

function, necessary  -  See essential function.

function, nonessential  -  See unnecessary function.

function, primary  -  See basic function or essential function.

function, required  -  See essential function.

function, required secondary  -  1. A secondary function that is essential to support the performance of the basic function, 2. A function that may result from specified design criteria.

function, secondary  -  1. The manner in which the basic function was implemented, 2. A function indicating quality, dependability, performance, convenience, attractiveness, and general satisfaction beyond that needed to satisfy minimum user needs, 3. Includes supporting, unwanted, unnecessary and required functions.

function, sell  -  1. A function that provides primarily esteem value [such as "improve style" or "enhance decor"], 2. A function that may result from specified design criteria.

function, supporting  -  1. A function required by the user to make a product sell, 2. A function that increases acceptance, 3. A function to assure dependability, assure convenience, satisfy user or attract user, 2. Also called a sell function. function, task - See user function.

function, use  -  See work function.

function, user  -  1. That function performed by a product that causes its purchase by a user, 2. The function performed by an employee for the company, 3. Also referred to as a task function.

function, unnecessary  -  1. A function not contributing to the utility or desirability of the product, 2. Also referred to as a nonessential function.

function, unwanted  -  1. A negative function caused by the method used to achieve the basic function, [i.e.; such as the heat generated from lighting which often must be cooled] 2. Also called an undesirable function.

function, work  -  1. A function which is essential to make the product perform as intended, 2. A function that provides use value, 3. Also called use function.

improvement, value  -  The same as value analysis except with emphasis on application to improve existing products.

index, value  -  1. The monetary relationship of function worth to function cost [expressed as VI=FW/FC] where VI is never greater than unity [e.g.; VI=0.79], 2.* The monetary relationship of function cost to function worth [expressed as VI=FC/FW] where VI is never less than unity [e.g.; VI = 1.00].

*investment, return on  -  In value methodology, the ratio of the dollars saved versus the cost of performing and implementing the study [normally expressed similar to the following; ROI=$8:1].

life, design  -  The period of time intended by the designer for product use; under expected levels of use, maintenance and repair, before product disposal and/or replacement.

life, product  -  The period of time a product is actually used, maintained and/or repaired before being taken out of service.

life, useful  -  The period of time of needed use by the customer for a product.

life, economic  -  1. That period of time over which an investment is considered to be the lowest cost alternative for satisfying a specific need, 2. The period of time used to justify obtaining a product from a financial standpoint as reflected by a contract period, lease, mortgage, loan agreement, statutory limitation, warranty, depreciation method, etc.

management, value  -  1. The same as value analysis except with emphasis on application as a management technique, *2. A specific application of value methodology.

methodology, value  -  1. The study of the relationship of cost and worth to function for any product, in a prescribed manner, using the job plan, *2. The preferred terminology by SAVE International encompassing the specific applications of VA, VE, VC, et al.

mismatch, value  -  When function cost does not fit or match user/customer function attitude for a given function.

model, cost  -  1. A diagrammatic representation of cost based on a hierarchical structure [often work breakdown structure] of product components or functions, 2. A model which sums to the total cost of the product.

model, energy  -  1. A diagrammatic representation, in a hierarchical structure, of the quantity of energy consumption caused by each of the product's components or functions, 2. A model that sums to the total energy used by a product.

model, LCC  -  1. A diagrammatic representation, in a hierarchical structure, of the present worth or annualized expenditures relating to a product for a specified period of time, 2. A model that sums to the total life cycle cost for a product.

model, space  -  1. A diagrammatic representation, in a hierarchical structure, of the square foot (or other unit of measure) of space allocated to each component of a facility, 2. A model that sums to the total amount of area or space in a building.

model, time  -  1. A diagrammatic representation, in a linear form, of the duration to perform all tasks associated with obtaining a product, 2. A model that sums to the total length of time to obtain a product and accounts for overlapping time/s of concurrent effort [i.e.; a PERT chart].

model, worth  -  1. A second set of numbers, in the same units of measure, superimposed on the same format used for a cost model, energy model, LCC model, space model or time model which represent the worth of that model element, 2. A model that sums to the total worth of a product for the resource measured.

objective, value  -  1. The same or necessary performance or acceptance at lower cost, 2. Better performance at the same cost, or at a higher cost if a greater market share is thereby obtainable.

ownership, cost of  -  See life cycle cost.

period, study  -  The same as life span.

plan, job  -  A sequential approach for conducting a value study, normally consisting of; an information step and/or function analysis step review or implementation step, and an optional follow-up or measurement step.

planning, value  -  1. The same as value analysis except with emphasis on application to strategic directions of new product development, organization strategic planning, or filling market niches, *2. A specific application of value methodology.

prevention, cost  -  The elimination of unnecessary costs during the development stages of designs or operations.

price, customer  -  1. The fixed sum of money or amount of service given or required to transfer of ownership of products, 2. Normally the sum of product cost plus profit.

profit, product  -  The difference between product price and cost where [price=cost+profit].

program, value  -  A stated plan or procedure that uses value methodology as its basis for optimizing total cost.

proposal, value change  -  1. A change submitted by in-house personnel to improve the value of a product, 2. Also called a value engineering proposal (VEP).

proposal, value engineering  -  1. The same as a value study proposal, 2. See also value change proposal.

proposal, value engineering change  -  (VECP) A change submitted by a contractor, pursuant to a contract provision, for the purpose of reducing the contract price or life cycle cost of the product under contract.

proposal, value study  -  A recommendation, resulting from utilizing value methodology, to change a product so as to achieve greater value and/or reduce overall cost.

quality, required  -  The minimal level of product performance necessary to satisfy the customer (not to be confused with the word value).

rate, discount  -  The rate of interest reflecting inflation and the time value of money that is used in the discount formula to convert costs and benefits occurring at different times to a common time.

*reduction, cost  -  A procedure which implies making sacrifices in product quantity, quality or performance to save money.

*research, value  -  The same as value analysis except with emphasis on application during product research.

*savings, cost  -  The difference between original or planned cost and final or estimated cost after implementation of a change or improvement.

*span, life  -  1. The period of time used to compute life cycle costs for all alternatives, 2. May be based upon useful life, economic life, product life, or design life, in that order of preference for use in life cycle computations.

*Specialist, Certified Value  -  One who is recognized by SAVE International as having minimum competency and knowledge in the application of value methodology.

*structure, work breakdown  -  1. A hierarchical breakdown of a product beginning with the total product at level 1, major assemblies at level 2, subassemblies at level 3, components at level 4, etc., 2. Also represented by a code of accounts.

*study, value  -  A study that employs value methodology to improve product value.

*target, cost  -  1. A cost goal for a system, subsystem, component and/or function; based upon experience, historical data, or equivalent function cost, 2. Often illustrated by cost models, 3. Function worth.

*team, multi-discipline  -  A group formed to conduct a value study that represents different aspects of the product [i.e.; customer, manufacturer, distributor] or, that represents different segments of an organization [i.e.; engineering, production, marketing, finance] or, that represents different skills [i.e.; architect, mechanical, electrical, structural].

*technology, value  -  1. The term used in the science or art of applying value methodology.

value, aesthetic  -  See esteem value.

value, annual  -  Past or future costs or benefits expressed as an equivalent uniform annual amount, taking into account the time value of money.

value, cost  -  Archaic, see use value.

value, economic  -  1. The relationship of benefits (utility) to cost as seen by the user, 2. The life cycle benefits as related to the cost of ownership, use and disposal of a product, 3. Its components are use value, esteem value, exchange value.

value, esteem  -  1. The monetary sum a user is willing to pay for functions providing prestige, appearance, and/or other nonquantifiable benefits, 2. The relative value a user places on the aesthetic functions provided by a product, 3. The monetary measure of the functions of a product that contribute to its desirability or salability but not its required functional performance, 5. The motivated desire to possess for the sake of possession, 6. Also referred to as aesthetic value.

value, exchange  -  1. The monetary sum at which a product can be traded, 2. The market value of a product or service at a given point in time.

value, function  -  1. The relationship of function worth to function cost, 2. See also value index.

value, future  -  the equivalent value at a specified time in the future of estimated recurring and replacement costs expected during the life of the product.

value, good  -  1. That which occurs when a product has reasonable cost and desired performance as determined by the user, 2. The lowest life cycle cost to reliably accomplish a function, 3. A relative economic comparator as determined by the user and measured by profit and sales.

value, market  -  The sale price of a product under the voluntary conditions of a willing buyer and a willing seller.

value, maximum  -  The lowest life cycle cost to reliably accomplish the minimum required performance.

value, perceived  -  The user's view of benefits received and the price of acquiring the product.

value, poor  -  The condition that occurs when function cost exceeds function worth by a significant amount.

value, present  -  The economic procedure to account for the time equivalent value of past, present, or future costs at the beginning of a base period.

value, product  -  1. The relationship of benefits to cost which conforms to a user's wants and resources in a given situation, 2. A specific combination of use, esteem, market, and exchange values.

value, salvage  -  1. The residual value of a product, net of disposal costs, that may derive from removal or replacement of the product during the study period, 2. Also the residual value from the sale of the product during or after the study period.

value, use  -  1. The monetary measure of the functional properties of a product that reliably accomplishes user's needs, 2. The life cycle cost (worth to cost relationship) considering user function only.

visibility, cost  -  1. The display of all costs for a product in one format at one time, 2. The breaking down and identification of costs hidden through aggregation, 3. Obtained through use of a cost model.

workshop, approved VE  -  A workshop approved by SAVE International for meeting the minimum training requirements to count as credit toward becoming a certified value specialist (CVS).

workshop, VE  -  A group meeting to carry on the work of conducting a value study of a product.

worth, function  -  1. The lowest overall cost that is required to perform a function, 2. The least cost attainable through using a functional equivalent, 3. The cost of a function without regard to the consequences of failure, 4. Referred to as the value of a function in some texts [not a preferred usage].

worth, present  -  See present value.

year, base  -  The year to which all future and past costs are converted when the present value method is used.