Competition is tough. As an industrial manager, you must be flexible. Suppose your company's best customer decides she wants an extra doohickey on your standard widget Furthermore, she wants a thousand of those modified widgets. Your engineers redesign it. Your marketing people mark up the price to reflect the extra cost and desired profit, and presto, you get the order. But did you really calculate all the costs? Maybe not. Maybe "confusion costs" stole some of your expected profits. As businesses add products or add product options, they may inadvertently add costs to their current products. They must search out thesehiddencosts and then eliminatethem or include them in the calculation of their pricing.
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