Tag Archives: product

Product-level costs

Definition:
Product-level costs arise from activities to support the production of the product or model. For example, engineering support costs for process modifications and product design depend on the existence of the product line and do not vary with the number of units or number of batches produced.

Calculation:
Sum of all costs for supporting production

This KPI is measured as: Financial Value (e.g. €, $)

Interpretation of results: Lower Is Better

Strategic objective:
Increase profitability

Number of variations to contract

Definition:
Difference in contacts per type of product or service. The more tailor made contracts, the less standardization and cost-efficient the business will be done. This can be a strategic choice, but bringing back the number of variations is always favorable.

Calculation:
Number of different contracts per type of product or service

This KPI is measured as: Number (amount Of Units, Rating, Etc)

Interpretation of results: Lower Is Better

Strategic objective:
Efficient operations