Theory of Target Costing and Quality Deployment

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  • 原価企画と品質展開の理論
  • ゲンカ キカク ト ヒンシツ テンカイ ノ リロン

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Abstract

<p>It is necessary to establish the price of a new product-with regards to its “quality corresponding to price” or in other words, its price performance-at the same level or higher when contrasting it with similar products that are not very different in price. I will first discuss this theory. In this theory, the thinking of quality deployment is essential. The total manufactured cost of a new product is to be an α percent of an established sale price (for example, about 70%) determined by the above method. When putting a new product out into a mature market, there is the issue of prior decision making with regards to market-oriented pricing and its product conception. The product design and target costing need to be in concordance with the above mentioned decision. Next, with regards to target costing for the above total manufactured cost, with the use of VA (Value Analysis) technique, cost reduction can be implemented based on the design change of existing parts and so on. VA is the core technology behind target costing. This is based on the same principle as the above product’s pricing theory (this technique is called QDm in this paper). There is a technique resembling VA called VE (Value Engineering). There are many publications on VA/VE by researchers involved in management accounting. However, the VE equation differs completely from the thinking behind VA and this needs to be taken into consideration.</p>

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