The Anatomy of Product Cost

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The Anatomy of Product Cost

Knowledge of Underlying Factors Determining Product Costs is Critical

Manufacturing a component requires tangible physical resources - the material mass, the labor time, time on machines, life of tools, machines, factories, energy, shipping, warehousing costs, and a whole lot more.

The fair-market economic cost of these resources, in a truly efficient market, with zero mark-up at any point in the supplier chain is the True Economic Cost of manufacturing the item.   

This whitepaper outlines what makes up product costs today and why having a better understanding of the True Economic Cost of a product will measurably benefit manufacturing organizations.

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