dollars dollars project over a given time period. The project must design and produce a deliverable that not only meets schedule and quality goals, but also a deliverable that can be produced in volume at 5 dollars/unit or less, in order to meet revenue goals. Target cost is not simply the cost of designing the deliverable; that is in the prototype cost; target cost is the target for the full design, production, and marketing of the deliverable.

Design to cost is an important concept in new product development. If the project is narrowly defined as the design and production of the product prototype only, then "success" in project management terms may simply meeting the estimated cost of the "front end" of the whole program. However, if the cost of the prototype is added to all other costs associated with getting the product to market, then we know the true amount of revenues we need to gain to cover all development and marketing costs to go beyond break-even.

This page intentionally left blank

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.

Get My Free Ebook

Post a comment