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Hi,
Why life cycle costing is useful for products with short life cycle but not products with long life cycle?
Beaches the longer the life cycle, the harder it is to estimate how long the life cycle will actually be and what the costs and revenues will actually be.
If we could estimate them exactly (which obviously we never could) then there would be no problem using life cycle costing!!
I read something in the BPP text regarding the ways of maximising return over the product life cycle and one of it is by maximising the length of the life span. Isn’t that contradicts the statement of life cycle costing is useful only for products with short life cycle?
It is a statement of fact – the longer the lifespan the better it is for the company.
That does not conflict with saying that doing the costing is more difficult the longer the lifecycle.
Again, please do watch my free lectures on this.
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