Product Cost Savings Segment

A.
Manufacturing Business Functional Costs:

The four major cost functions in the manufacturing business include: Create, Make, Sell and Serve
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  • The Create Cost function encompasses all research and development efforts, the costs incurred to design the product.

  • The Make Cost function includes the costs required to produce the product, getting it to the plant door.

  • The Sell Cost function covers all marketing, sales and shipping costs.

  • The Serve Cost function includes all after-sales service for the product.

B.
Distribution Business Functional Costs:

The four major cost functions in a wholesale, retail or distribution business include: Locate, Present, Sell and Serve
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  • The Locate Cost function would cover all the costs of selecting the site and constructing the building used for the distribution of products and services.

  • The Present Cost function includes the costs of choosing the products the customer may buy, purchasing those products and placing those products on display.

  • The Sell Cost function in a distribution business includes all the costs the company incurs to sell the product.

  • The Service Cost function includes all after-sale services the company provides its customer.

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