Target Hierarchy Analysis Method In The Application Of Cost Estimation Research

The market is full of competition. Enterprises’s profit space is getting smaller and smaller. Besides, the prices of variety resources continue to rise sharply. Many firms face to the pressure of high cost.Therefore, it is supposed to reduce the cost of products in early research stage. During the research stage, estimation of cost is one of the most important things. The accuracy of cost estimation will affect the results of cost control.One of the defects of cost estimation is that there is lack of cost information exchange between the cost estimation of products and their parts. To solve this problem, this paper proposed a coordination machanism and build the cost models of the product level and the part level. This coordination machanism can estimate the cost of products accurately through the repeatedly coordination. Firstly, it reviews the literatures of the products cost estimation models and analytical target cascading, pointing out the advantages and disadvantages in the methods of cost estimation. Afer that, it demonstrates the research content of this paper. Then, it discusses the relative theory of objective cost. It classifies and compares these different cost estimation methods. The core of this paper is the coordination machinism of cost estimation. It lays the foundation for modeling through the discreption of analytical target cascading application example. It builds the cost estimation models of the products and their parts. Analytical target cascading can minimize the difference between the objective cost and estimated cost through coordination. It will finally estimate the cost more accurately. At last, after the discussion of the systemic theory and models foundation, the paper applies the research through the instance. The result achieves the design requirements of objective cost by coordination mechanism. It provides a new approach to estimate the cost of products.