List the Three Product Characteristics That a Target Costing Design

question 4

Essay

List the three product characteristics that a target costing design team would choose to enhance or minimise as they make trade-offs to achieve the target cost. Describe two of the types of trade-offs they may consider.

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Definitions:

Nudges

Subtle policy shifts or design changes that steer people's behavior in predictable ways without forbidding any options or significantly changing economic incentives.

Prospect Theory

A behavioral economic theory that suggests individuals value gains and losses differently, leading to decisions that can deviate from traditional economic predictions which assume rational behavior.

Behavioral Economics

A field of economics that studies how psychological, cognitive, emotional, cultural, and social factors affect the economic decisions of individuals and institutions.

High Upfront Costs

High Upfront Costs are significant initial expenses incurred before a project, investment, or purchase begins to generate any revenues or savings, often acting as a barrier to entry.