Value Engineering:
Value engineering is a systematic and organized approach that focuses on improving the value of a product, process, or system by analyzing its functions and reducing costs while maintaining or improving its performance and quality. It involves identifying unnecessary costs and finding alternative solutions to achieve the same or better functionality at a lower cost.

The Term 'Value' in Value Engineering:
In value engineering, the term 'value' refers to the utility or worth of a product. It is the measure of how well a product satisfies the needs and requirements of the customer. The value of a product is not determined solely by its cost or price, but rather by its ability to meet customer expectations and provide benefits.

Understanding the Options:
Let's analyze the given options to understand why the correct answer is option 'D', which states that value refers to the utility of the product:

a) Manufacturing cost of the product:
The manufacturing cost of a product is the total cost incurred in producing it, including material costs, labor costs, and overhead expenses. While manufacturing cost is an important factor in value engineering, it is not the sole determinant of value. Value engineering aims to identify ways to reduce manufacturing costs without compromising the utility or performance of the product.

b) Selling price of the product:
The selling price of a product is the amount at which it is sold to the customer. While the selling price is influenced by factors such as manufacturing cost, profit margin, and market demand, it does not directly reflect the value of the product. Value engineering focuses on maximizing the value provided to the customer, not just the price they pay.

c) Total cost of the product:
The total cost of a product includes all costs associated with its production, distribution, and use. While total cost is considered in value engineering to identify areas of cost reduction, it is not synonymous with value. The goal of value engineering is to optimize the value-to-cost ratio by enhancing the utility of the product while minimizing costs.

Utility of the product:
The utility of a product refers to its ability to satisfy a customer's needs, wants, or desires. It encompasses the benefits, features, and functions offered by the product. In value engineering, the focus is on maximizing the utility of the product while minimizing costs. By analyzing the functions and performance of the product, value engineers aim to find alternative solutions or improvements that enhance its value to the customer.

Conclusion:
In value engineering, the term 'value' refers to the utility or worth of a product, which is determined by its ability to meet customer expectations and provide benefits. While factors such as manufacturing cost, selling price, and total cost are considered, they do not directly represent the value of the product. Value engineering aims to optimize the value-to-cost ratio by enhancing the utility of the product while minimizing costs.