8D Cost Trades with Entanglement


Author: Douglas Howarth

Publication Date: April 1, 2023

Published by: Journal of Cost Analysis and Parametrics

Abstract:

Many products have sizable components that comprise much of their costs. In such cases, it is crucial for the suppliers and the offerors of the ultimate products to work together to achieve common goals. It is possible to display such interactions in as few as two dimensions, and many firms might seek such answers as they are easily constructed and understood. However, as this paper demonstrates, seeking easy answers by artificially reducing the scope of the problem can lead producers astray. It is possible to get all the costs right and still sink a project. This paper proposes a construct with more dynamic elements, as it uses eight dimensions to understand how jets and their engines can work in tandem to enhance sales. This specific example generalizes to other markets.

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