1. Market Decisions Chapters 11 & 12 ME 2027 Performance and Cost Analysis ME 2605 Cost Management and Control (for IMIM) Håkan Kullvén, KTH, 2007 Hakan.kullven@indek.kth.se

2. Situations The company's role in the marketplace −P−Price taker −P−Price setter The situation for the pricing −S−Short-run −L−Long-run The policy of the company −S−Skimming or penetration The product life cycle, PLC Example on page 420

3. Target costing Determine target price by asking the customers Deduct a target margin from this price Estimate the actual cost of the product If necessary; try to drive the actual cost down under target level −K−Kaizen costing

4. Profitability analysis Figure 11.4 page 426

5. Decision tree analysis Figure 12.3 page 462

6. Next, we… are going to look at decisions about capital investments, e.g. when investing in machines, education or something else that is for a longer period of time Chapters 13 & 14