There is an increasing demand in aero-engine products for better efficiency and environmental performance while maintaining low product cost. Unlike performance, the theory behind cost effectiveness is not well understood. This white paper proposes a unit cost modelling methodology applied to an aero-engine part. An objective of the cost model is to allow engineers to understand the breakdown of product cost, identify “key cost drivers” and hence manage the product cost. A value driven design concept is outlined to understand cost impact of design decisions at the early design stage through Unit Cost Model.