US CMA Part 2 · Chapter 6 · Question 19 of 22
During product design, a cross-functional team examines each component of a product to find ways to reduce cost without reducing the functions that customers value. This technique is known as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Value engineering
Explanation
Value engineering systematically evaluates the design, materials and processes of a product to reduce cost while preserving the features customers value. It is a key tool for closing the gap between current cost and target cost under target costing. Life-cycle costing tracks costs over a product's whole life, and peak-load pricing charges more when demand is highest.
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