Learn in the textbookGoal Setting and Evaluation Metrics for Business Strategy
DefinitionValue Engineering (バリューエンジニアリング, VE) is a method that treats the value of a product or service as the ratio of its function to its cost, and raises it through a set procedure.
ExplanationValue, being a ratio, rises if you cut cost without losing needed functions, or raise function by more than cost goes up. Function here means what the user actually needs the product to do, and cost likewise means the total expense as seen from the user's side.
AnalogyLike choosing an umbrella not just by the price tag but by how many years it will last and what repairs will cost, comparing whether it does enough to justify what you pay.
Memory hookPicture a fraction with function on top and cost on the bottom: the smaller the bottom and the bigger the top, the higher the value.