Cost Structure

Basics

In order to sell a product, one must determine the sale price - which is a part of the the overall cost structure of the enterprise. It can't be too high or too low - it must be justified by the goals of the enterprise. Sale price can vary significantly. The key is to be able to justify the sale price - via clarity on the Unique Value Proposition.

Cost structure refers to both the inputs and outputs - cost of production, selling price, everything in between.

See more about Pricing at wikipedia - https://en.wikipedia.org/wiki/Pricing

Extreme Enterprise Cost Structure

Hint: See Extreme Enterprise Cost Structure

General Notes

Cost structure is the exact cost of product delivery from R&D, materials, production, training, labor, marketing, distribution, sale, and support over the lifetime of a product.

Cost Structure determination during a development phase of a product is iterated rapidlyi and depends on:

1. Design optimization - for simplicity and modularity as embodied in OSE Specifications
2. Sourcing strategy
3. Production tooling
4. Production tooling
5. Production labor costs
6. Distribution development
7. Level of support