Use Value

• It is defined as the qualities and properties needed to accomplish a service, product or work.

Esteem Value

• It provides properties, features and attractiveness to a service, product or work which make the ownership desirable.

Scrap Value

• It is the money which can be recovered when the item is not needed. It is the scrap value.

Cost Value

• It is the total cost of material, labour, overhead and services to produce an item (or to deliver a service).

Exchange Value

• It is the property and qualities which enable to exchange (or trade) a product (or service) for something else, which is needed by the exchanger.
• A customer purchases an item when the exchange value is less than the perceived (or guessed) use and esteem value.
• The most important issue, which a customer generally looks into a product, is a combination of use and esteem value.
• For example, new car models coming into market provide either better service or (and) are good looking. Value is a relative concept. Normally, it increases when product cost decreases.

Reasons for unnecessary costs

Value can change with time and place. So, it has its own dynamics. It can be computed performance wise. Value is a relationship between want and willingness to pay for it.

Shortage the information:

• Inadequate data on the functions of the holder/user wants or needs information on new materials, goods and courses that it can encounter these needs, within the required cost range.
• Deficiency of information in constructions like defined one doesn’t have any information about application of material in construction.

Deficiency ideas: Insufficiency to develop alternate solutions.

• In many cases, decision makers accept one of the first workable solutions that come to mind.
• This tendency invariably causes Unnecessary costs which can be eliminated by requiring the development of additional alternate ideas and then making choices based on economics and performance.

Instantaneous situations:

• A crucial transport, design, or schedule can force decision makers to reach a quick deduction to satisfy a time obligation without proper regard to good value.
• These impermanent measures frequently become fixed part of the design or service, resulting in gratuitous costs.

Truthful incorrect politics:

• Unnecessary costs are often caused by decisions based on what the decision maker believes to be true, rather than on the real facts.
• Honest wrong beliefs can impede a good idea that would otherwise lead to a more economical decision or service.

Variations idea of user, organization or owner:

• Often, the owner’s new requirements force changes during design or construction hat increase costs and alter the schedule. In too many cases, the owner is not cognizant of the impact of the desired change.

Shortage of coordination:

• Lack of communication and coordination are principal reasons for unnecessary costs. VE opens channels of communication that facilitate discussion of subjects and allows the expression of opinions without undue concern about acceptability
• Also, it creates an environment that promotes listening and responding to varying points of view without becoming defensive.

Outdated standards and specifications:

• Many of the equipment and specifications in use in large construction programs are at least ten years old.
• As technology progresses, continual updating of data is required, but it is often not accomplished.