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The problem that original design manufacturing (ODM) companies encounter with the request for quotation (RFQ) process is that there is no effective and efficient methodology for them to formulate accurate and profitable RFQs. The purpose of this paper is to present a quality function deployment (QFD)‐, concurrent engineering (CE)‐, and target costing‐based methodology for ODM companies to formulate accurate and profitable RFQs.

From eight Taiwan electronics ODM companies, 15 people are interviewed to understand their current methods for formulating RFQs and the problems of these methods. Based on the interview results, it was decided to make use of the merits of QFD, CE, and target costing by integrating them into the proposed methodology.

A case study is presented to illustrate a successful application of the proposed methodology in a case company. The case study shows integrating QFD, CE, and target costing into the proposed methodology allows the authors to effectively and efficiently formulate an accurate and profitable RFQ for the case company.

The interview sample quantity of this study is limited to eight Taiwan electronics companies, which is insufficient to represent all ODM companies in various industries. For the future research, it is suggested researchers collect more samples from different industries in order to verify the effectiveness of the proposed methodology in ODM companies from different industries.

This paper aims to integrate QFD, CE, and target costing to come up with a systematic ten‐step approach that can accurately formulate the three parts of an RFQ: the product specifications proposal, the product price quotation, and the product development schedule. By adopting this methodology, ODM companies can provide accurate and profitable RFQs to ODM customers, thus increasing their chances of obtaining ODM business.

Target costing determines the cost of a building before design. The cost of the product is based on the customer's requirements for the product's performance and the customer's willingness to pay for such performance. However, if the designers cannot achieve the target cost, the benefits of target costing are wasted. The purpose of this paper is to describe design steering, a methodology for managing design process to achieve target cost and purposed value for the customer.

The design steering concept steers the complex design process by knowledge management and rapid cost feedback loops, especially in the very early stages of design. Traditional estimating together with CAD systems cannot produce feedback because of the cumulative nature of design. This paper introduces advanced building information modelling (BIM) that supports project management in cost and quality management. As CAD systems start from zero, this BIM starts from the full content. The BIM constructs all the quantities and costs of the building components before the design starts, basing on the client's needs. The model acts as a “defending champion” in relation to the designer's proposals during the design.

Design steering concept is already in commercial use with encouraging results. A case study explains how design steering affects to designers' decision making. Design steering has helped mutual understanding between the designers and management enabling to achieve the target cost.

At the moment more transparency on goals, processes and information models of clients, project managers and designers are needed in order to support the commitment process of the participants.

Design process has not been earlier dealt with from top to bottom, but from bottom to top. New BIM technologies enable both perspectives.

Despite appearing in the literature over 10 years ago as a potentially exciting cost management technique, there is still limited agreement about the nature of target costing. The purpose of this study is to explore the characteristics of target costing, and to test whether these characteristics were adopted in three European companies that used target costing.

This paper draws on case study data, collected at three manufacturing companies (consumer electronics, machinery, and transportation equipment).

The paper identifies eight characteristics of target costing, based on the early Japanese case descriptions. These characteristics are related to the way a target is set and how progress towards that target is measured. The findings of the case studies confirm these characteristics. However, some differences were found regarding the interpretation of the strict rule that “the target cost cannot be exceeded at product launch”.

The results indicate that future research on the adoption of target costing cannot be disconnected from its characteristics. Further studies might investigate whether degree of openness to suppliers, leadership position, time pressure and position in the supply chain can explain the noted differences in characteristics among companies.

The characteristics identified in this paper provide an aid to researchers and managers considering target costing. Detailed case descriptions provide best practices examples for other companies.

This study is the first empirical paper concerned with describing the typical characteristics of target costing. By exploring the characteristics, we hope to inspire others to further explore this interesting phenomenon.

As there is scant research outside Japan on the implementation of target costing, the purpose of this research is to examine target costing practices in New Zealand.

A mail questionnaire survey was sent to 80 New Zealand manufacturers, with a response rate of 31 (39 per cent).

A total of 12 of the 31 respondents use target costing. Findings on the use of target costing that contrast with or add to prior studies include the following: target costing is being applied to existing products; the manufacturing department is highly involved in target costing; the involvement of suppliers in target costing is relatively low; considerable adjustments are made to the calculated allowable costs, especially in order to assist sales of future products and to ensure the achievement of target costs; and higher achievement of target costs is associated with higher firm performance. The goals of target costing and the departments involved in the practice were similar to those in prior studies.

The sample size and minimal number of firms actually using target costing has made it difficult to obtain statistically significant results. The survey method prevents follow‐up questions and clarification of ambiguities. Single measures of performance and strategy were used.

This survey provides academic researchers and teachers and firms implementing or using target costing systems with a greater understanding of how target costing is being used by New Zealand manufacturers, as well as adding to the scant research on target costing outside Japan.

The main purpose of this study is to provide healthcare institutions with a management accounting framework that helps them achieve their quality goals and cost targets when providing services under bundled payment schemes.

After providing a theoretical framework on both bundled payments and target costing, the success factors of the former are compared with the principles of the latter in order to analyze the compatibility and complementarity of these models. Afterwards, an example of their potential combination in practice is introduced and ideas for future research are suggested.

It is concluded that, apart from presenting similar underlying goals as regards quality and cost, bundled payments and target costing display elements in common that make them compatible from a theoretical standpoint.

Because bundled payments models are relatively new, studies on their compatibility with managerial techniques emerging from industries other than healthcare do not abound in the literature.

Focusses on the use of target costing for new product development. This approach concentrates on determining costs for a product during the planning and design stage. Also describes the use of cross‐functional teams made up of industrial marketers, cost accountants and others critical to the design and manufacturing decisions required for determining the price and features with which a product is most likely to appeal to potential buyers. After deducting the desired profit margin from the projected selling price, planners develop estimates of each product element that make up a product′s costs for design, manufacturing, sales and marketing. Further analysis is carried out to identify and estimate the cost of each component that makes up the finished product. Stresses the critical role that management accountants and other members of an organization can play in the design and manufacture of a new product at a specified price.

The use of management accounting in the agricultural industry has received very little attention by accounting researchers. Agriculture is currently in an era of significant change and adjustment, where change in accounting practice needs to occur in response to external pressures. The traditional use of the gross margin system of accounting has tended to underline a notion that has had a powerful influence on farm business planning that most costs are fixed and that the best way of reducing them to achieve profit maximisation is to spread them by increasing the scale of operation. This logic has been supported by an economic environment heavily influenced by agricultural policy measures that focused on artificial support for market prices and/or direct payments linked to production activities. We argue that the decoupling of support from production has combined with a number of other changes related to payments and cost structures (including those linked to the recent dramatic rise in the price of oil) to provide a very different economic context for farm business planning. The response we advocate to this changed situation is to make greater use of two alternative methods of cost analysis; namely relevant costing and target costing. These have been developed and applied outside agriculture. They have not so far been used in a formal sense within agriculture but have links to existing methodologies used in farm business planning, such as partial budgeting, and in intuitive approaches already adopted by farmers as revealed in recent fieldwork.

To achieve a full understanding of the role of marketing from plan to profit requires a knowledge of the basic building blocks. This textbook introduces the key concepts in the art or science of marketing to practising managers. Understanding your customers and consumers, the 4 Ps (Product, Place, Price and Promotion) provides the basic tools for effective marketing. Deploying your resources and informing your managerial decision making is dealt with in Unit VII introducing marketing intelligence, competition, budgeting and organisational issues. The logical conclusion of this effort is achieving sales and the particular techniques involved are explored in the final section.

Although life cycle costing (LCC) is well established in theory and practice, little is known about the conditions of its adoption and its impact on the achievement of cost-management goals. Therefore, this paper aims to analyze the adoption and benefits of LCC.

The analyses are based on questionnaires collected from a survey of German firms.

The results demonstrate that the extent of LCC adoption is positively associated with the extent of guarantee and warranty costs, voluntary upfront and follow-up costs for ecological sustainability and the extent of target costing adoption. In contrast, the extent of LCC adoption is negatively associated with the amount of precursors and/or intermediates that are purchased. The results also demonstrate that firms perceive LCC to be beneficial for various aspects of cost management. Firms report that the greatest benefit of LCC is related to the identification of cost drivers.

This investigation provides a starting point for future studies of the conditions of LCC adoption and the benefits of LCC. This study is subject to limitations, particularly with respect to the operationalization of our independent variables, the number of contextual variables and the general limitations of survey research.

The results inform practitioners of the situations in which it is most appropriate to adopt LCC. In addition, this study identifies various cost-management goals that are supported by the use of LCC.

This study provides the first comprehensive analysis of the conditions of LCC adoption and advances the literature regarding the impact of LCC on the achievement of cost-management goals. Furthermore, this study provides a starting point for future research into the implementation of LCC and the effects of LCC on management accounting practices.

The target costing method works “backward” from traditional cost‐plus methods and begins with a targeted sales price for a product. This price is set based on what the customer is willing to pay. It considers not only the preferred current selling price but also the later life cycle pattern of prices. This technique has key managerial implications. This article considers these implications along with implementation guidelines. Examples of industries successfully using target costing are included. Ongoing controversies concerning where the techniques can best be used are discussed. Further considered are international differences in target costing as well as challenges of global outsourcing along the supply chain. The article ends with implementation challenges, significance for practice, and suggestions for future research.