Product cost management Product Cost Management is a set of tools, processes, methods, and culture used by firms who

develop and manufacture products to ensure that a product meets its profit (or cost) target. There is not an agreed upon definition for product cost management or an agreed scope for what it encompasses. Some people argue that Product Cost Management is a synonym for Target Costing [1] [2] .[3] However, others argue that Product Cost Management is different, be cause Target Costing is a pricing method, whereas, PCM is focused on the maximum profit or minimum cost of a product, regardless of the price at which the produ ct is sold to the end customer.[4] Some analysts [5] seem to equate PCM to Desig n-to-Cost.[6] Some practitioners of PCM are mostly concerned with the cost of the product up u ntil the point that the customer takes delivery (e.g.manufacturing costs + logis tics costs) or the Total Cost of Acquisition. They seek to launch products that meet profit targets at launch rather than reducing the costs of a product after production. Other people believe that Product Cost Management extends to a Total Cost of Ownership or Lifecycle Costing (Manufacturing + Logistics + Operational Costs + Disposal). Depending on the practitioner, PCM may include any combinati on of organizational/cultural change, processes, team roles, and tools. Many bel ieve that PCM must encompass all four aspects to be successful and have shown ho w the four parts work together [7] .[8]

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