Cost analysis and estimating for engineering and management ch07

Cost Analysis and Estimating for Engineering and Management Chapter Operation Estimating © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-1 Overview  Find Time/Cost for Production Steps  Determine Direct Labor Time  Look at a Metal Machining Example Set Up Cycle Time  One Time Tooling Costs  Overview of Flow Line Manufacturing © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-2 Background  “Design” Defines a Part  Design Is Broken Down into Operations  Labor & Material Determined  Cost Estimated © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-3 Definitions  Manufacturing Operations Produce Changes to Objects to Increase Value  Cost For Utilization of Labor & Materials to Increase Value of Some Object © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-4 Operation Estimates  Establish Costs for Components and Assemblies  Initiate Cost Reductions  Provide Standards  Compare Different Designs  Support Decisions © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-5 Operation Cost Elements © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-6 Industries  Construction Plant and Equipment Portable Output of Industry Immobile and unique © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Value of Output Expensive Ch 7-7 Industries  Agriculture Plant and Equipment Mobile Output of Industry Moves off the plant site and is numerous © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Value of Output Inexpensive Ch 7-8 Industries  Information Plant and Equipment Transitional and Service Output of Industry Temporary © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Value of Output Low priced Ch 7-9 Industries  Manufacturing Plant and Equipment Fixed Output of Industry Moves off the plant site and is numerous © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Value of Output Cheap to expensive Ch 7-10 Tool Cost  Tools Facilitate Manufacturing  Tool Cost Is Part of Operation Cost  Tools – Permanent, One-Time Cost Nonrecurring, Initial Fixed Cost  Tools Require Engineering Design  Tools Can Be a Large Cost © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-69 Tool Cost Estimating  Simple Methods Standard Time Data Use Tables Broad, General Categories  One Time Cost Estimate Less Critical Usually Hours Is the Increment © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-70 Drill Jig Example © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-71 Drill Jig Cost Description of tool elements Angular base plate, C-angle Guide bushing Hinge plate Clamp with screw Feet, Pin locators, Total Productive hour cost for tool making Cost of tool, 44.8 x 75 Material cost, $25/lb Total cost of tool © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Hr 7.0 2.0 12.0 7.5 7.5 8.8 44.8 $75 $3360 200 $3560 Ch 7-72 What to Do with Tool Costs  Add to Overhead (NOT Recommended)  Amortize Over Production Cot  N C nif N Eq 7.18 Is Critical Too Small N, Tooling Cost Too High Too Large N, Tooling May Not Be Paid For © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-73 Tooling vs No Tooling  Compare Manufacturing Cost Using Tooling (Saves Labor) Without Tooling (Additional Labor) C nif Na (1  p )  SU  I T  D  M © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Eq 7.19 Ch 7-74 Calculate the Operation Cost  Batch Manufacturing Situation  Determine Hours for the Lot lot hours = SU b  N H b  Find Eq 7.20 the Batch (Lot) Cost Cbo lot hours PHCi © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Eq 7.21 Ch 7-75 Total Product Manufacturing Cost  Cost for All Operations n Ctbo   lot hours PHC i i i  Include Material and Tooling Costs C C bu  bo / N  C dm  © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management C ot /N Eq 7.22 Ch 7-76 Cost for Pinion Example Lot Op no Lot hr PHC 10 24.4 39.16 $955 $4.78 20 17.9 90.98 $1631 $8.16 30 2.9 90.98 $267 $1.34 40 10.4 39.16 $409 $2.04     $3262         $16.32       $37.66       Unit cost cost Total Lot Cost Unit Production Cost Total Unit Cost (incl $21.43 Matl) © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-77 Flow Line Manufacturing  Mass Production, Assembly Lines  All Operations Interdependent  Times Determined from Station Requiring the Longest Time  Imbalance Leads to Idle Time for Other Stations © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-78 Flow Line Set Up Time  Find Maximum Station Set Up Time SU f max SU i   Total Cost for Line Set Up n Set Up Cost =  PHCi SU f , i 1, 2,  , n i © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Eq 7.23 Ch 7-79 Flow Line Cycle Time  Find Maximum Station Cycle Time H f max{H i }  Total Cost for Line Cycle Time n Cycle Cost = N  PHCi H f , i 1, 2,  , n Eq 7.24 i © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-80 Total Product Time (Flow Line)  Determine Lot Hours lot hours = nSU f  nNH f  If Eq 7.25 nSUf is Very Small Compared to nNHf Set Up Cost Can Be Ignored Covered in Overhead © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-81 Total Product Cost (Flow Line)  Total Labor Cost n Cf =  i  Total n PHCi SU f  N  PHCi H f Eq 7.26 i Product Cost C fu C f / N  Cdm  C © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management ot /N Eq 7.27 Ch 7-82 Summary  Determined Costs for Manuf Operations  Found Direct Labor Times Set Up and Cycle Times Machining Time  Studied a Metal Machining Example  Added Tooling Costs  Briefly Looked at Flow Line Costs © 2004 Pearson Education, Inc Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-83 ... Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-4 Operation Estimates  Establish Costs for Components and Assemblies  Initiate Cost Reductions  Provide Standards... Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-3 Definitions  Manufacturing Operations Produce Changes to Objects to Increase Value  Cost For Utilization... 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Ch 7-6 Industries  Construction Plant and Equipment Portable Output of Industry Immobile and unique © 2004