CVS Benchmarking and Best Practices in Value Studies

Question 1

In a VM context, what is the PRIMARY purpose of benchmarking?

Accepted Answer

To establish best-in-class cost and performance references that define worth and identify value gaps

Answer

To set team performance goals for the facilitation workshop

Answer

To compare facilitators' hourly rates across different consulting firms

Answer

To rank competing VM methodologies by number of published case studies

Question 2

Which type of benchmarking is MOST useful when no direct industry competitor data is available for a VM study?

Accepted Answer

Functional benchmarking that compares the same function performed in a different industry

Answer

Competitive benchmarking using rival product teardowns

Answer

Internal benchmarking using the organization's own historical project data

Answer

Financial benchmarking using stock market valuations

Question 3

A VM team discovers through benchmarking that a competitor achieves the same required function at 60% of the current design's cost. How should this finding MOST appropriately be used?

Accepted Answer

Use the benchmark cost as an input to establish the function's worth and set a target for creative idea generation

Answer

Discard the finding because competitor data may be inaccurate

Answer

Adopt the competitor's design directly without further analysis

Answer

Report the gap to management without incorporating it into the VM study

Question 4

In VM best practices, what distinguishes a 'performance benchmark' from a 'cost benchmark'?

Accepted Answer

Performance benchmarks measure how well a function is executed; cost benchmarks measure how cheaply it is executed

Answer

Performance benchmarks apply only to manufacturing; cost benchmarks apply only to services

Answer

Cost benchmarks are always set internally; performance benchmarks always use external data

Answer

They are synonymous terms used interchangeably in SAVE International literature

Question 5

Which of the following is the MOST reliable source for establishing a cost benchmark during a VM Information Phase?

Accepted Answer

Published cost engineering databases, teardown analyses, or supplier quotes for equivalent function performance

Answer

The project owner's initial budget estimate

Answer

The VM facilitator's personal judgment based on prior projects

Answer

The average of all team members' cost guesses

Question 6

After completing a VM study, a team compares their proposed alternative against a best-practice benchmark and finds the proposal is still 15% above benchmark cost. What is the MOST appropriate VM response?

Accepted Answer

Accept the proposal if it still improves the Value Index over the baseline, and document the remaining gap as a future opportunity

Answer

Reject the proposal because it does not match the benchmark exactly

Answer

Discard the benchmark data and rely only on the project specification

Answer

Extend the creative phase indefinitely until the benchmark is achieved