Process Value Analysis - PVA

AAA

DEFINITION of 'Process Value Analysis - PVA'

A strategy that businesses use to determine whether all of their operational expenses are necessary and if they could be operating more efficiently. Process value analysis looks at what the customer wants and then asks if each aspect of operations is necessary to achieve that result. The goal of process value analysis is to eliminate unnecessary expenses incurred in the process of creating a good or service without sacrificing customer satisfaction.

INVESTOPEDIA EXPLAINS 'Process Value Analysis - PVA'

In conducting PVA, managers must look at whether any activities could be eliminated or streamlined to decrease operational costs while still delivering what customers want without sacrificing quality. Managers will consider whether any new technologies could be profitably implemented, whether errors are being made that could be avoided, whether there are extra steps in the process that are unnecessary and so on. Any steps in the value chain process that are identified as not adding economic value may be changed or thrown out.

RELATED TERMS
  1. Cash Flow From Operating Activities ...

    An accounting item indicating the cash a company brings in from ...
  2. Discontinued Operations

    A segment of a company's business that has been sold, disposed ...
  3. Operating Revenue

    Income derived from sources related to a company's everyday business ...
  4. Continuing Operations

    Continuing operations is a business term used to describe the ...
  5. Income From Operations - IFO

    The profit realized from a business' own operations. Income from ...
  6. Operating Expense

    A category of expenditure that a business incurs as a result ...
Related Articles
  1. Measuring Company Efficiency
    Fundamental Analysis

    Measuring Company Efficiency

  2. Spotting Profitability With ROCE
    Fundamental Analysis

    Spotting Profitability With ROCE

  3. Analyze Cash Flow The Easy Way
    Fundamental Analysis

    Analyze Cash Flow The Easy Way

  4. Find Investment Quality In The Income ...
    Options & Futures

    Find Investment Quality In The Income ...

comments powered by Disqus
Hot Definitions
  1. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  2. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
Trading Center