Product costing methods in manufacturing pdf
Swansoft CNC Simulator is real-time 3D CNC machine system simulation and advanced G-code verification software. It allows the user to simulate all the CNC machine operations and debug NC product costing methods in manufacturing pdf using the same platform!
CNC program simulation and g-code debugger teaches programming. The license information is contained in a USB dongle key that will be shipped to you. 2D and 3D simulationSSCNC is a real time 3D CNC simulator that uses OpenGL for fast and accurate 3D rendering modeling. Dynamic rotation, zoom, pan, full screen and switch views during simulation in real time. Changes in the program are simple and intuitive. Do you want to Use SSCNC? Target costing is an approach to determine a product’s life-cycle cost which should be sufficient to develop specified functionality and quality, while ensuring its desired profit.
Target costing is defined as “a disciplined process for determining and achieving a full-stream cost at which a proposed product with specified functionality, performance, and quality must be produced in order to generate the desired profitability at the product’s anticipated selling price over a specified period of time in the future. The fundamental objective of target costing is to manage the business to be profitable in a highly competitive marketplace. Target costing was developed independently in both USA and Japan in different time periods. Target costing was adopted earlier by American companies to reduce cost and improve productivity, such as Ford Motor from 1900s, American Motors from 1950s-1960s. Market driven target costing is the first section in target costing process which focuses on studying market condition and determining company’s profit margin in order to identify allowable cost of a product. Company’s long-term sales and profit objective are developed from extensive analysis of relevant information relating to customers, market and products. Only realistic plan is accepted to process the next step.
Product mix is designed carefully to ensure that it satisfies many customers, but also does not contain too many products to confuse customers. Following the completion of market-driven costing, the next task of the target costing process is product-level target costing. Product-level target costing concentrates on designing products that satisfy the company’s customers at the allowable cost. To achieve this goal, product-level target costing is typically divided into three steps as shown below.
The first step is to set a product-level target cost. Since the allowable cost is simply obtained from external conditions without considering the design capabilities of the company as well as the realistic cost for manufacturing, it may not be always achievable in practice. Thus, it is necessary to adjust the unachievable allowable cost to an achievable target cost that the cost increase should be reduced with great effort. Regarding the complexity of problems in the real world, implementing the target costing process often relies on the computer simulation to reproduce stochastic elements. The factors influencing the target costing process is broadly categorized based on how a company’s strategy for a product’s quality, functionality and price change over time. However, some factors play a specific role based on what drives a company’s approach to target costing.
Intensity of competition and nature of the customer affect market-driven costing. Competitors introducing similar products has been shown to drive rival companies to expend energy on implementing target costing systems such as in the case of Toyota and Nissan or Apple and Google. Product strategy and product characteristics affect product-level target costing. Characteristics of product strategy such as number of products in line, rate of redesign operations and level of innovation are shown to have an effect.
Higher number of products has a direct correlation with the benefits of target costing. The degree of complexity of the product, level of investments required and the duration of product development process make up the factors that affect the target costing process based on product characteristics. Product viability is determined by the aforementioned factors. In turn, the target costing process is also modified to suit the different degrees of complexity required. Supplier-Base strategy is the main factor that determines component-level target costing because it is known to play a key role in the details a firm has about its supplier capabilities.
Aside from the application of target costing in the field of manufacturing, target costing are also widely used in the following areas. MC method has been shown to be effective in determining the impact of financial uncertainties in project performance. Some major design parameters are specified using this methods including Facility Operation Schedule, Orientation, Plug load, HVAC and lighting systems. The entire process consists of three phases: initiation, definition and alignment. The definition process involves defining and validating the case by tools such as values analysis and bench marking processes to determine the allowable costs.
The process is influenced by unit locations, degree of comfort, number of patients per room, type of supply location and access to nature. Target costing: first and second comings”. The Society of Management Accounts of Canada. Target costing and kaizen costing in Japanese automobile companies”. Target costing and how to use it”. Journal of Business and Industrial Marketing. The competitive environment and strategy of target costing implementers: evidence from the field”.
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Lean Construction Institute White Paper N8. Target value design: using collaboration and a lean approach to reduce construction cost”. Recommended Practices for the Application of Lean Construction Methods to Building New Australian LNG Capacity”. This page was last edited on 24 March 2017, at 08:04.