estimates of a product's revenues and expenses over its entire life cycle beginning with research and development, proceeding through the introduction and growth stages, into the maturity stage, and finally into the harvest or decline stage. Life-cycle budgeting adopts a LIFE-CYCLE COST approach. It is intended to account for the costs at all stages of the VALUE CHAIN (R&D, design, production, marketing, distribution, and customer service). This
information is important for pricing decisions because revenues must cover costs incurred in each stage of the value chain, not just production. Life-cycle budgeting emphasizes the relationships among costs incurred at different value-chain stages, for example, the effect of reduced design costs on future customer-service costs.