A Model of Product Life Cycle Cost Management Based on the Example of the Spartan Multimedia Shooting Training System

Waldemar Swiderski and Wieslawa Rolek
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Waldemar Swiderski: Department of Simulators, Military Institute of Armament Technology, 05-220 Zielonka, Poland
Wieslawa Rolek: Department of Finance, Military Institute of Armament Technology, 05-220 Zielonka, Poland

Economies, 2021, vol. 9, issue 2, 1-9

Abstract: Cost management is a process that contributes to increases in efficiency that have an impact on a finished product. Comprehensive cost management uses information that is created by the cost accounting system and new concepts of measurement and valuation of product manufacturing costs. This paper presents the product life cycle costing (LCC) method and the target cost method as concepts used in cost management based on the example of the SPARTAN system. SPARTAN is a stationary training system designed to train, monitor and evaluate sighting and shooting techniques for small arms. The LCC method refers to the estimated cost of a product (in our case, the SPARTAN system) life cycle and it is calculated as the sum of the acquisition costs, ownership costs and operating costs. Having taken into account costs of acquisition, ownership and operation, the results of the LCC analysis were obtained, which show that, keeping in mind the whole life cycle cost, it will be more profitable to purchase the modernized version of the SPARTAN system despite its higher acquisition costs.

Keywords: life cycle costing; cost management; target costing; shooting training system (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2021
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