Chris said, “Let’s continue on Jalen’s point that optimized cost levels can change over time. A reduction in an optimized cost level is relative to some prior optimized cost level. Lasting reductions in COGS from some prior optimized level are achieved through introducing new designs, materials, and methods not previously available. The new materials and methods come from innovation activity. Innovation in materials, methods, product design, equipment design, or anything else that reduces the cost of direct materials, direct labor, and manufacturing overhead will change the optimized level of cost of a product that uses them. There is often opportunity either left in products for future optimization or ...
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