Target costing

Activities

• Activity 1: Clarifying and itemising the problem or Task
• Activity 9: Assurance of the fulfilment of the requirements

Necessary tools

• Target cost tracking software

Description

This method can be used to determine a sensible cost target. The costs throughout the entire product development process can be tracked and cost drivers can also be determined.

Procedure

1. Carry out target cost determination
2. Determine target cost breakdown across functional or component areas
3. Ensure target cost tracking: compare forecast actual costs with target costs and take action if necessary

Sources

• Lindemann 2009, p. 314