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Decisions had to be made early in the development stages so suppliers were brought into the discussion early. MB used supplier knowledge to understand the costs of the manufacturing process by taring down competitors products and identifying components and their related costs. Supplier linkages were used to develop function groups by which all components could be grouped into and assigned costs. Target costing was used in conjunction with supplier knowledge to determine the costs of production on the basis of MB's pricing strategy so the AAV would earn the desired profit.
Supplier importance to AAV
Because MB was not producing vehicles at the lowest price they needed their suppliers to develop quality components that met MB quality control standards...
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