Key Topics: Life cycle costing, expected value analysis, and profit forecasting.

Models Covered: Life cycle cost analysis, probability-weighted cost estimation, and profitability evaluation.

Description: This case examines Shoe Co’s approach to costing and profitability over the product lifecycle of a new smart shoe. It involves calculating total production costs, considering material, labor, and fixed costs, while also factoring in expected marketing costs with probabilistic outcomes. The focus is on forecasting total profit over two years using life cycle principles and expected value methods.