Early Identification of Costs during Product Development — Development-Concurrent Cost Calculations

Abstract

An essential element of cost management is a running cost calculation, concurrent with the product development process. In this way an early identification and influencing of costs can begin, as far as possible, right at the decision time (shortloop feedback control system, see Fig. 4.4-2). Thus at the beginning of a product development process — starting from the setting of the cost target — costs of the new product can be entered into the company costing structure. This allows a continuous cost comparison and stimulates cost-cutting measures in the case of deviations from the targets.

Conventional cost accounting is often not suitable for this task. Therefore, so-called quick (or, short) cost calculation procedures have been developed which make use of important parameters involved in product development. After an overview, the essential procedures for short calculation will be introduced in this chapter. Finally, computer-integrated calculation will be introduced, which is of increasing importance.