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value engineering

Value engineering is the review of new or existing products during the design phase to reduce costs and increase functionality in order to increase the value of the product.  The value of an item is defined as the most cost-effective way of producing an item without taking away from its purpose;.  With value engineering, cost reduction should not affect the quality of the product being developed or analyzed.

The ratio of function to cost implies that the value of a product can be increased by either improving its function or decreasing its cost.  In value engineering, the cost related to production, design, maintenance, and replacement are included in the analysis.