To avoid having to develop target costs for all 20,000 components in a typical new model line, the engineers only performed detailed target costing on two or three representative variations. Each variation contained. approximately 3,500 components, and typically 80% of the components were common across variations. There foer, about 5,000 components were subjected to detailed target costing. The target costs of the other 15,000 components were estimated by comparing them to similar components in the 5,000 already target costed. The completion of this target costing exercise provided cost reduction objectives for all of components in the new model. The comparison of the allow able cost of each function and the sum of the expected cost of the components inn that function after cost reduction indicated whether the major function could be produced at about the allowable cost. When the sum of the component cost was too high, additional cost reductions were identified until the target cost of the representative variation was acceptable. The target costs for each component were compared to the prices quoted by the suppliers. If the quoted prices were acceptable, the quote was accepted. If the initial quote was too high, then further negotiations were until an agreement could be reached.