Certified Supply Chain Professional (CSCP) Practice Exam

What do ongoing costs relate to in a product's life cycle?

1. Costs that occur at the beginning of production

2. Costs that relate to development

3. Costs that occur throughout the life of the product

4. Initial investment costs

The correct answer is: Costs that occur throughout the life of the product

Ongoing costs in a product's life cycle refer to the expenses that are incurred over the entire duration of the product's existence in the market, extending beyond just the initial phases such as development or production. These costs include manufacturing expenses, maintenance, operational costs, marketing expenditures, and any costs associated with customer support and product delivery. These costs can vary as the product ages and the market conditions change, necessitating continual management and oversight. In contrast, the other options focus on specific stages or types of costs. Initial investment costs relate primarily to what is spent to get a product into production and typically occur at the beginning of the life cycle. Costs that relate to development are those incurred during the R&D phase before the product is launched. Both of these categories represent costs that, while important, do not capture the broader scope of financial commitments made throughout the entire life cycle of the product. Thus, ongoing costs uniquely emphasize the continuous financial obligations that must be managed as a product is sold and supported in the market.