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:
- Design optimization - for simplicity and modularity as embodied in OSE Specifications
- Sourcing strategy
- Production tooling
- Production tooling
- Production labor costs
- Distribution development
- Level of support
