Cost planning

As stated in the previous paragraph, in order to maintain competition, it is important that while undertaking cost management all three aspects of cost planning, maintenance and improvement are carried out. Above all, in project management, it is also said that the upstream activities specify 70% of the cost incurred, and hence it is a very important management activity.

The cost planning activity is the cost tool related to the planning/development of products. It is not just aiming at the cost calculation in the planning stage of products/services prior to the manufacturing, but is an activity to set a cost target based on the market-oriented attitude considering market type and market prices relative to product strategy

Since cost planning is a mechanism of cost setting based on the product strategy of a business, it varies between business, and herein a generic example is given in the figure below (Table 4-5-22).

^_________________________Development of________________________^____________________Achievement of_______________^

Market a a

Table 4-5-22: Cost planning process model

â–  Elements of cost planning

Explanations are given below of the conc epts required for the successful cost planning and the techniques used.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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