Casabee was established in 2010 and manufactures a range of kitchen utensils, which it makes from material purchased from a number of suppliers. The recently appointed Managing Director has expressed increasing concern about the trends in falling sales volumes, rising costs and hence declining profits over the last two years.

There is general agreement amongst the managers of Casabee that these trends are the result of the increased intense competition that has emerged over the last two years. Casabee continues to have a reputation for high quality, but this quality is now being matched by the competition.

The competitors are taking Casabee's share of the market by selling equivalent products at lower prices. It is thought that in order to offer such low prices, the production costs of the competitors must be lower than Casabee's. Its MD is now proposing the following to improve sales volumes, costs sand profits:

(i) We must enter a Value Analysis exercise. Value Analysis is a cost reduction and problem solving technique that analyses an existing product, in order to identify and reduce or eliminate any costs which do not contribute to value or performance.

(ii) We must enter a Value Analysis exercise. Value Analysis focuses on the value to the customer of each function of the product, and consequently allocates resources to those functions from which the customer gains the most value.

(iii) We also must enter a Functional Cost Analysis exercise. Functional cost analysis is a method that can be applied to examine the component costs of a product or service, in relation to the value as perceived by the customer. Functional cost analysis can be applied to new products, and breaks the product down into its component parts. For example, a kitchen utensil may have the function to be dishwasher- and microwave-safe, and therefore require less manual cleaning.
(iv) Both value analysis and functional cost analysis have potential to help Casabee, but Value Analysis is likely to be a more useful technique, because kitchen utensils are products that are sold more on the basis of their use value, rather than their esteem value.
Which of the foregoing arguments are valid?

A. (i), (iii) and (iv)

B. (i), (ii), (iii) and (iv)
C. (i) and (iii)
D. (ii) and (iv)