[SMG OM 323] - Final Exam Guide - Comprehensive Notes for the exam (67 pages long!)

• School: Boston University
• Department: Operations & Technology Management
• Course: SMG OM 323
• Professor: Justin Ren

Document Summary

Main theme in the entire target costing practice is, what should the new product cost? . Customer comes first in design process and when designers are challenged to meet their demands. Swenson has identified six basic principles of target costing as it is practiced in large companies today: price-led costing. All members of the value chain--e. g. , suppliers, distributors, service providers, and customers--are included in the target costing process: a life-cycle orientation. Their design challenge is to close the gap between the expected cost, quality, and functionality of the most current design and target costs, quality, and functionality. As the team traverses the new product funnel, it will acquire more information to enable it to refine its initial estimates: estimate the retail price for your product. Middlemen to get your product to the end consumer. Typical retail distribution channel margins are around 50%.