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Every decision in the product development process affects cost: design is typically considered to account for 70–80% of the final cost of a project such as an engineering project [1] or the construction of a building. [2] In the public sector, cost reduction programs can be used where income is reduced or to reduce debt levels. [3]
The level of collaboration, transparency, and information re-use enabled by Cost Estimating and Efficient Project Delivery Software drives 15-25%+ reductions in procurement cycles, six to ten times faster estimating, reduce overall project times, as a significant reduction in change orders and the virtual elimination of contract related legal ...
The cost breakdown analysis is a popular cost reduction strategy and a viable opportunity for businesses. [ 1 ] [ 2 ] [ 3 ] The price of a product or service is defined as cost plus profit, whereas cost can be broken down further into direct cost and indirect cost . [ 1 ]
Design-to-Cost (DTC), as part of cost management techniques, describes a systematic approach to controlling the costs of product development and manufacturing.The basic idea is that costs are designed "into the product", even from the earliest concept decisions on and are difficult to remove later.
Target costing is defined as "a disciplined process for determining and achieving a full-stream cost at which a proposed product with specified functionality, performance, and quality must be produced in order to generate the desired profitability at the product’s anticipated selling price over a specified period of time in the future."
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