Explain briefly what are the stages or procedures or steps involved in product life cycle costing. (Part 3 of 4)


Below are the steps/stages/procedures involved in product life cycle :

  • market research-identifies the products which the customers want, how much they are prepared to pay for it and how much quantity they intend buy
  • specification-provides detais such as required life, maximum permissible maintenance costs, manufacturing costs units required, delivery date, expected performance of the product
  • design-proper drawing and process schedules are defined
  • prototype manufacture-prototype may be used to develop the products and eventuall to demonstrate that it meets the requirements of the specifications
  • development-testing and changing to meet the requirements after the initial run as a product when first made rarely meets the specifications
  • toolings-tooing up for production means building a productionine, building expensive jigs, buying the necessary tool and equipments
  • manufacture-involves the purchase of raw material and components, use of labor to make and assemble the product
  • selling-stimulating and creating demand for the product when the product is available for sale
  • distribution-the product should be distributed to the sales outlets and to the customers
  • product support-the manufacturer or supplier should ensure that spare and expert servicing facilities are available for the entire life of the product
  • decommissioning-when a manufacturing product comes to an end, the plant used o build the product must be sold or scrapped

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