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What is the Value of the Value Index?
VE General Knowledge

What is the Value of the Value Index?

The primary objective of function analysis is to find the functions/areas of the project that have the best opportunity to improve value, or in other words which functions should be worked on in the creative phase. The early VA/VE pioneers like Larry Miles and Carlos Fallon discussed the worth of functions. Later it seems that the value index formula used today derived from their thoughts, with Don Parker for one, contributing to its use. For many years people have tried to use the value index as a way to determine those functions. The value index is defined as a ratio that expresses function cost to function worth. Function cost is determined during the function analysis phase by allocating cost of the elements of a project across the functions that each element performs. The result is the total cost of each function in the project. Function worth is defined by SAVE as the lowest overall cost to perform the function without regard to criteria or codes.

Value Index = Function Cost / Function Worth

James Rains…

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