What is value for money?
Value for Money
Achieving value for money – goods and services procurement guide
5 ways to get value for money
Best value for money or the production value for money, these are just some of the terms that are used in any kind of business transaction. Value for money refers to the most favorable combination of profitability, quality and cost to satisfy customer needs. In this case: profit means considering the whole life cycle cost. Quality is there to meet a specification that is satisfactory for the purpose. The entire supply chain management plays an important role in all this.
Best value for money requires a mixture of risk management, human capital, and effective pricing. Best value for money therefore involves proper assessment of risks, identifying the source of risks, managing them, and then using appropriate controls to minimize the impact of them on business. All of these techniques are applied in the process of Best Value For Money. One of the techniques that has been used since the early 1970s is the use of statistical data, information gathered from experience, accumulated data, and from other sources such as third party organizations and the like, in order to assess the value for money issue.
Another technique that is used in the Best Value for Money is the process of warehouse analysis, which involves the analysis of the physical conditions of a warehouse, its functionality, the type of merchandise stored, and so on. Analysis of warehouse conditions is essential in warehousing and distribution because physical damages due to weather, lightning, explosion, fire, and so on, can significantly affect the operations of any business. Warehouse inventories are also important to assess.