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Topic Combination of QFD with Target Costing

Combination of QFD with Target Costing

Home Forums General Forums Methodology Combination of QFD with Target Costing

This topic contains 1 reply, has 2 voices, and was last updated by  MBBinWI 7 months, 1 week ago.

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    Ruediger Hoffmann
    Participant
    Reputation - 24
    Rank - Aluminum

    Hi,

    I want to use QFD as a starting point for Target Costing and want to make sure that I don’t oversee anything. Normally, I’d use the ‘relative importance’ from QFD as an indicator how the component costs should relate to each other: the higher the importance the bigger can the cost portion be.

    Any objections against this?

    What if the correlation is negative?
    My answer would be that this means a higher risk, but it does not impede the importance as such. I’d just ignore the (-) sign and proceed as with the positive correlation.

    I’d be grateful if someone could provide special information or links related to this subject. I am looking especially for application of these tools in the IT environment.

    Kind regards

    RĂ¼diger

    #507726 Reply

    @ruedigerhoffmann – While this might seem a rational approach, it is not based in logic. It works for price, but not costs. Costs must be apportioned with the overall outcome of the system in mind. Think of your automobile. The external skin has a relatively high value to the customer, but the relative cost, compared to other parts of the auto, is likely a lot less. Costs are what they are. Aggregated, they are either acceptable and provide margin between the cost and price or they are not. You should always be seeking to lower costs over time.

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