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Thursday, March 19, 2009

Definition of Value for Money

Extract from http://www.qualityresearchinternational.com/glossary/valueformoney.htm

Value for money

core definition

Value for money is one definition of quality that judges the quality of provision, processes or outcomes against the monetary cost of making the provision, undertaking the process or achieving the outcomes.

explanatory context

Value for money tends to be equated with value for money expended, although it could take into account ‘real’ cost including hidden costs and opportunity costs.,

analytical review

Erlendsson (2002) states:

Value for money (VFM) is a term used to assess whether or not an
organisation has obtained the maximum benefit from the goods and
services it both acquires and provides, within the resources available to it.

He goes on to add:

Some elements may be subjective, difficult to measure, intangible and misunderstood. Judgement is therefore required when considering whether VFM has been satisfactorily achieved or not. It not only measures the cost of goods and services, but also takes account of:
- the mix of quality, cost, resource use,
- fitness for purpose,
- timeliness, and
- convenience to judge whether or not, together, they constitute good value.

sources

Campbell, C. & Rozsnyai, C., 2002, Quality Assurance and the Development of Course Programmes. Papers on Higher Education Regional University Network on Governance and Management of Higher Education in South East Europe Bucharest, UNESCO.

Erlendsson, J., 2002, Value For Money Studies in Higher Education http://www.hi.is/~joner/eaps/wh_vfmhe.htm 04 January 2002


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