Firms use product classifications as a mean for structuring diversified ranges of products and harmonizing their description. In many industries, products are subject of differentiation and increasing customer requirements which both require a stronger customization of products. This trend affects also product classifications which undergo changes quicker and more often as well as get more detailed. Therefore, classifying and describing products can no longer be regarded as a one-time task; it has to be done multiple times or even on a regular basis. In this paper, we take a cost perspective and propose a method for estimating product classification costs in firms.
