Product: Management and Development
Product: Management and Development
Original Article

Cost Planning for Functions and Components in engineering design – theory and application

Haiko Schlink, Ronny Kein, Milton Wetzel Pereiraa

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Planning of life-cycle costs is an essential requirement for the cost-oriented design of customised engineering products. The planned costs need to be broken down and allocated to the product’s (sub)divisions, or functions and components. The paper presents the theoretical background for “guesstimation” - an estimation expressed as a result of subjective perceptions and cognitions - of the weightings which are necessary for costs to be appropriately assigned. The weightings help planners to state how functions may cause costs in components, and vice versa. The paper also describes an application in Brazilian industry and indicates further research opportunities.


Function costs, cost estimation, target costing, value engineering
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