VALUE AND RISK MANAGEMENT

Value and Risk Management

Part I - Value Management and Value Engineering Report

Introduction

Value Management and Value Engineering are the examination of all relevant options for the design and construction of a project, resulting in a refinement of the design and identification of any budget constraint. It is a process that gives everyone involved in the design and construction, the opportunity to participate in the decision process. Value Management and Value Engineering in construction projects are the combination of judgments, classification and authentication of possible risks with related causes, followed with qualitative evaluations on the consequences. In addition to this, value for money is the value in which customer benefit is offered by a project or activity. The client must be able to choose among several alternatives in order to achieve maximum benefit in terms of time, cost and quality.

Value Engineering

The value engineering also called value analysis is a systematic method based on features that serve to increase the value of products, projects or processes. This process helps to communicate and understand different perspectives, to innovate and make analysis. The value engineering improves the value. In the given case SBE innovations Ltd, which is a partnership formed between a private developer and public sector local authority. For the purpose of developing a mixed-use recreation and commercial centre to stimulate development and enhance the local community, this improvement may take the following forms; reducing the cost of the life cycle of an interchange, improving security of a concept or reducing the impact on the public by shortening the duration of a project (Linda and Rose, 2008, pp. 104-127). The terms value management engineering (VE), Value Analysis (VA) and Value Management (VM) used synonymously and interchangeably by some people. The approach is also referred to sometimes as a control value, improved value or insurance value. It is a powerful methodology for solving problems or reducing costs while improving performance requirements / quality. The value, as defined, is a ratio between the process and cost, and can therefore be increased by improving the process or reducing the cost (Buehler, 2008, pp. 14-32).

Value for money

Value is what customers are willing to pay for the return of a product, process or project. This gives an exceptional value when clearly defines the desired performance and when you get the lowest possible cost of the life cycle. The value for money is a definition of quality applied to the value of the product. Being the somewhat qualitative and subjective quality measured to obtain a ratio in relation to price (Linda, 2009, pp. 14-62). This figure does not represent the best product, not the cheapest, but the has the best price for a given quality. From the standpoint of the market can be considered an indicator of the perceived quality of the products or services, therefore, it is important that the value engineering should be based on a structured process for evaluating different options; this includes the following essential steps; ...