Lifecycle costing - part 2
Taught by Nick Drape · AI tutor support included
In this second part on lifecycle costing, you'll learn why decisions made during the research and development phase are so critical—studies show that early investment can determine 70-90% of total product costs.
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In this lesson
- 0:00 Lifecycle Costing: Cost management and R&D phase
- 2:19 Time to market and product lifecycle extension
- 3:42 Design phase determines majority of costs
- 4:38 Lifecycle Costing recap and key benefits
About this lesson
You'll discover the three key actions lifecycle costing advocates: prioritising cost management at the design stage, minimising time to market to charge premium prices early, and maximising product lifespan to benefit from economies of scale and spread fixed costs across more units. Through a worked example, you'll see how to identify which lifecycle phase determines the majority of costs and understand why lifecycle costing gives you the complete picture from product inception to abandonment. This approach is essential for Performance Management (PM) and helps you recognise when traditional annual costing misses the bigger strategic view. By following lifecycle costing principles, you'll be able to explain how businesses like Apple successfully recoup heavy R&D investments and create genuinely profitable products.
Duration: 6m
Transcript
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