COST ANALYSIS OF NEW PRODUCT DEVELOPMENT OF THE WOVEN CLOTH GROUPS COMMUNITY ENTERPRISES IN CHAINAT PROVINCE

Abstract

          The Objectives of this research article were to develop and to analyze cost of the new product development of the woven cloth groups, community enterprises in Chainat province, Thailand. This is a qualitative research that is divided into two steps. First step is to use purposive sampling to in - depth interview from two groups, which are six members from 247 members, 18 woven cloth groups; and 12 women customers who like woven cloth products are conducted. The data of those in - depth interviews are analyzed to create the new product models which are reviewed by five experts. Second step is to send the new product models to two experts to train 10 volunteers who have sewing ability from woven cloth groups members. The cost analysis is based on Deming cycle, production cost, and activity based costing. The findings of the new product development process show six steps: 1) searching the new products, 2) surveying customers’ needs to the new products, 3) sketching the new product models, 4) checking the new product models, 5) preparing to produce the new products, and 6) producing the new products. For cost analysis results of new product development are defined to the unit product cost equations into the form of production cost: direct materials, direct labor, and manufacturing overhead. The cost of the new product development process is the manufacturing overhead costs that are defined into three activities: 1) creating the new product models activity, 2) preparing the production activity, and 3) producing the new product activity. It represents the manufacturing overhead costs as the primary cost of development of new products and is the source of cost reduction for new products.