ABSTRACT
This chapter explores different types of costs associated with the various tasks involved during the product life cycle. It presents how the financial analyses are performed by determining costs, revenues, and profits as functions of time and how the values of different cash flows are considered to take account of interest and inflation in the evaluation of different alternatives. The traditional approach in determining the product price is to add all the costs per unit and the required profit per unit to come up with the price for the unit. Many different software applications are available to perform product life-cycle costing and to create various reports. The costs and timings are directly affected by how the trade-off issues are resolved. The chapter presents a simplified cash flow analysis of an automotive product program. Programs and projects involving the development of complex automotive products encounter a number of developmental problems and challenges.
