Advantages of product life Cycle

Advantages of product life Cycle

1.    Understanding profitability

Product life cycle costing helps in understanding & predicting the profitability of the product during the different stages and as whole (during the life cycle).

2.    Cost analyses

Product life cycles break down the cost at different stages. This provides a better understanding of cost to be incurred at different  stages. These costs understand helps management to adopt appropriate strategy for controlling those costs.

3.    Pricing

Product life cycle costing is very helpful to adopt appropriate pricing strategy for different phases. It explains that each stage require price reconsideration.

4.    Future planning

Product life cycle costing is a kind of future planning for the product. Therefore product life cycle costing may be used as planning tool for the future. Product life cycle costing itself provides grounds for product planning. b