target costing comes to the final step, finding ways to achieve it. Engineering methods such as value engineering (VE), design for manufacture and assembly (DFMA), and quality function deployment (QFD) are commonly adopted in this step. Target costing and value engineering Value engineering (VE), also known as value analysis (VA), plays a crucial role in the target costing process, particularly at the product level and the component level. Among the three aforementioned methods in achieving the target cost, VE is the most critical one because not only does it attempt to reduce costs, but also aims to improve the functionality and quality of products. There are a variety of practical VE strategies, including zero-look, first-look and second-look VE approaches, as well as teardown approaches. Regarding the complexity of problems in the real world, implementing the target costing process often relies on the computer simulation to reproduce stochastic elements. For example, many firms use simulation to study the complex relationship between selling prices and profit margins, the impact of individual product decisions on overall group profitability, the right mix of products to enhance overall profit, or other economic modeling to overcome organizational inertia by getting the most productive reasoning. In addition, simulation helps estimate results rapidly for dynamic process changes. Factors affecting target costing The factors influencing the target costing process is broadly categorized based on how a company's strategy for a product's quality, functionality and price change over time. However, some factors play a specific role based on what drives a company's approach to target costing. Factors influencing market-driven costing Intensity of competition and nature of the customer affect market-driven costing. Competitors introducing similar products has been shown to drive rival companies to expend energy on implementing target costing systems such as in the case of Toyota and Nissan or Apple and Google. The costing process is also affected by the level of customer sophistication, changing requirements and the degree to which their future requirements are known. The automotive and camera industry are prime examples for how customers affect target costing based on their exact requirements. Factors influencing product-level costing Product strategy and product characteristics affect product-level target costing. Characteristics of product strategy such as number of products in line, rate of redesign operations and level of innovation are shown to have an effect. Higher number of products has a direct correlation with the benefits of target costing. Frequent redesigns