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. Zooming In On Net Operating Income
    Investing

    Zooming In On Net Operating Income

  2. Measuring Company Efficiency
    Fundamental Analysis

    Measuring Company Efficiency

  3. Spotting Profitability With ROCE
    Fundamental Analysis

    Spotting Profitability With ROCE

  4. Analyze Cash Flow The Easy Way
    Fundamental Analysis

    Analyze Cash Flow The Easy Way

comments powered by Disqus
Hot Definitions
  1. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific ...
  2. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another ...
  3. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  4. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
Trading Center