XYZ Ltd is producing an engine which consists of many components. The procurement manager wants to find cost reduction opportunities and minimise part varieties.
Which of the following may help her to achieve these objectives?
1. Value analysis
2. Segment analysis
3. Variety reduction
4. Standardisation
- 2 and 3 only
- 1 and 3 only
- 3 and 4 only
- 1 and 4 only
Answer(s): D
Explanation:
Value analysis is often defined as a systematic process for improving the value of a product, service or project. It is typically used in the following ways:
- To determine the value of each component used
- To find cost reduction opportunities by optimising the components used
Segment analysis helps procurement and supply to shape and manage the supply markets.
There is no concept known as Variety reduction.
Standardisation is the process which is used to reduce varieties of products or parts. In this scenario, the company's objective is cost reduction, then value analysis or value engineering is more likely to be applied. Also the company aims at reducing variety, standardisation can be combined with value analysis to produce the best results.
LO 3, AC 3.4
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