Which of the following statements is the best definition of `value engineering?
Answer(s): B
Value Engineering (VE) is concerned with new products. It is applied during product development. The focus is on reducing costs, improving function or both, by way of teamwork-based product evaluation and analysis. This takes place before any capital is invested in tooling, plant or equipment. This is very significant, because according to many reports, up to 80% of a product's costs (throughout the rest of its life-cycle), are locked in at the design development stage. This is under- standable when you consider the design of any product determines many factors, such as tooling, plant and equipment, labour and skills, training costs, materials, shipping, installation, maintenance, as well as decommissioning and recycle costs.LO 3, AC 3.4
Which of the following specific markets is most likely to have the lowest entry barrier?
Answer(s): E
Start-up costs are generally low in service industries, and the main requirement is a level of knowledge and skill in that particular service.LO 2, AC 2.1
A buyer in Housing Authority is considering using performance specification in upcoming social housing project.What should buyer be aware when using this type of specification?
Answer(s): C
In construction, specifications are written documents that describe the materials and workmanship required for a development. They do not include cost, quantity or drawn information but need to be read alongside other contract documentation such as quantities, schedules and drawings. Specifications vary considerably depending on the stage to which the design has been developed, ranging from performance (open) specifications that require further design by a contractor or sup- plier, to prescriptive (closed) specifications where the design is already complete when the project is tendered.Prescriptive specifications give the client more certainty about the end product when they make their final investment decision (i.e. when they appoint the contractor), whereas a performance specification gives the contractor and suppliers more scope to innovate and adopt cost effective methods of work, potentially offering better value for money. Typically, performance specifications are written on projects that are straight-forward, standard building types, whereas prescriptive specifications are written for more complex buildings, or buildings where the client has requirements that might not be familiar to contractors and where certainty regarding the exact nature of the completed development is more important to the client.Performance specification has some disadvantages:- Well-defined performance metrics are needed to ensure that the specified performance will achieve the desired outcome- Require reliable, practical, economical tests of performance- Evaluations are subjective and require additional time and effort to complete Therefore, if a performance specification is used, the buying organisation will have to ensure that they are able to define and conduct tests on whether supplier's solution can deliver the desired out- come.
- CIPS study guide page 118-121- Performance specification - Designing Buildings Wiki- Partnership for Public Procurement (cips.org)LO 3, AC 3.1
Which of the following is the process for improving the value of a new product or service?
Answer(s): A
Value Engineering (VE) is concerned with new products. It is applied during product development. The focus is on reducing costs, improving function or both, by way of teamwork-based product evaluation and analysis. This takes place before any capital is invested in tooling, plant or equipment. This is very significant, because according to many reports, up to 80% of a product's costs (throughout the rest of its life-cycle), are locked in at the design development stage. This is under- standable when you consider the design of any product determines many factors, such as tooling, plant and equipment, labour and skills, training costs, materials, shipping, installation, maintenance, as well as decommissioning and recycle costs.
CIPS study guide page 171-172LO 3, AC 3.4
A company is planning the procurement of an IT system and wants to agree a through-life contract with the supplier to ensure ongoing system support. The first step in producing that specification should be to:
Answer(s): D
Writing a high-quality specification is very crucial in every purchase. In through-life management, it is even more important since the assets often have very high value. Defining user requirement is the first step to write a specification. Without doing this right, many problems may arise in later stages.
CIPS study guide page 132LO 3, AC 3.2
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