ABSTRACT
This chapter addresses the basics on developing cost sensitive products. Understanding the basics of product cost starts with understanding two key product development areas; selection and design. In order to understand product cost the engineer must examine those items that are defined by the requirements as selection and those that are allowed to be designed. Determining the level on which a design team should attack the cost problem depends on the skills of the team and the types of risks the engineering team is willing to accept, as well as the product requirements. There exist several basic techniques for understanding product cost during the development of the design. These techniques can be used when the design is in process so that the inputs can be incorporated into the product. The complete cost model can then be calculated and combined with the development budget to make effective cost trade-offs. Throughout the design process there are many cost pitfalls.
