Cost analysis of electronic systems 2nd

10241_9789813148253_tp.indd 22/11/16 2:46 PM WSPC Series in Advanced Integration and Packaging Series Editors: Avram Bar-Cohen (University of Maryland, USA) Shi-Wei Ricky Lee (Hong Kong University of Science and Technology, ROC) Published Vol 1: Cost Analysis of Electronic Systems by Peter Sandborn Vol 2: Design and Modeling for 3D ICs and Interposers by Madhavan Swaminathan and Ki Jin Han Vol 3: Cooling of Microelectronic and Nanoelectronic Equipment: Advances and Emerging Research edited by Madhusudan Iyengar, Karl J L Geisler and Bahgat Sammakia Vol 4: Cost Analysis of Electronic Systems (Second Edition) by Peter Sandborn Chelsea - Cost Analysis of Electronic Systems.indd 02-08-16 10:43:54 AM 10241_9789813148253_tp.indd 22/11/16 2:46 PM Published by World Scientific Publishing Co Pte Ltd Toh Tuck Link, Singapore 596224 USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601 UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library WSPC Series in Advanced Integration and Packaging — Vol COST  A NALYSIS  OF  ELECTRONIC  SYSTEMS Second Edition Copyright © 2017 by World Scientific Publishing Co Pte Ltd All rights reserved This book, or parts thereof, may not be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage and retrieval system now known or to be invented, without written permission from the publisher For photocopying of material in this volume, please pay a copying fee through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA In this case permission to photocopy is not required from the publisher ISBN 978-981-3148-25-3 Printed in Singapore Chelsea - Cost Analysis of Electronic Systems.indd 02-08-16 10:43:54 AM Preface to the Second Edition I received helpful criticism from numerous sources since the first edition of this book was published in 2013 In addition to the first edition’s use as a graduate course text, we are now using selected chapters in an undergraduate course on engineering economics and cost modeling Along with the inputs I have received on how to make the original topics more complete, I have also had numerous requests for new material addressing new areas Of course no book like this can ever be truly complete, but attempting to make it so keeps me out of trouble and gives me something to on the weekends and evenings I have added two new chapters and two new appendices to this edition The new chapter on real option analysis treats modeling of management flexibility and provides a case study on maintenance optimization A chapter on cost-benefit analysis has also been added This chapter comes as the direct result of many inquiries about how to model consequences (benefits, risks, etc.) concurrent with costs The new appendices cover weighted average cost of capital and discrete-event simulation, both of these topics don’t warrant a chapter, but nonetheless are useful topics for this type of book In addition to the new chapters and appendices, several new sections have been added to the 1st edition chapters and new problems have been added to all the chapters (and a few problems that students convinced me didn’t quite make sense have been deleted) Peter Sandborn 2016 v b2530   International Strategic Relations and China’s National Security: World at the Crossroads This page intentionally left blank b2530_FM.indd 01-Sep-16 11:03:06 AM Preface to the First Edition Twenty years ago many engineers involved in the design of electronic systems took, at most, a secondary interest in the cost effectiveness of their design decisions; they considered that someone else’s job or an issue to be addressed after the initial release of the product.1 Today the world has changed Every engineer in the design process for an electronic product is also tasked with understanding, or contributing to the understanding of, the economic tradeoffs associated with their decisions Yet aside from general engineering economics that focuses on capital allocation problems, system designers have virtually no resources and obtain little or no training in cost analysis, let alone analysis that is specific to electronic systems Unfortunately, when engineering students were asked what they thought the cost of a product was (and assigned to determine cost estimates of products in an undergraduate capstone design course at the University of Maryland) they all too often added up the costs of procuring the bill of materials and declared that to be the cost of the product Few students are surprised when shown a breakdown of the life-cycle costs or the cost of ownership of systems, but virtually none, even those who had taken courses in engineering economics, were equipped to competently estimate the manufacturing or life-cycle cost of a real product This book is an outgrowth of a course on Electronic Product and System Cost Analysis developed at the University of Maryland Since 1999, the course has been taught as a one-semester graduate course (populated with a mix of senior-level undergraduates and graduate students) and many times in the form of an industry short course Many types of electronic systems have been primarily driven by time to market rather than cost; this situation is not necessarily shared by non-electronic systems vii viii Cost Analysis of Electronic Systems This book is intended to be a resource for electronic system designers who want to be able to assess the economic impact of their design decisions on the manufacturing of a system and its life cycle The book is oriented toward those interested in the entire electronic systems hierarchy from the bare die (integrated circuits) through the single chip packages, modules, boards, and enclosures This book provides an in-depth understanding of the process of predicting the cost of systems Elements of traditional engineering economics are melded with manufacturing process modeling and lifecycle cost management concepts to form a practical foundation for predicting the real cost of electronic products Various manufacturing cost analysis methods are included in the book: process-flow cost modeling and parametric, cost-of-ownership, and activity-based costing The effects of learning curves, data uncertainty, test and rework processes, and defects are considered in conjunction with these methodologies In addition to manufacturing processes, the product lifecycle costs associated with the sustainment of systems are also addressed through a treatment of the cost impacts of reliability (sparing, availability, warranty) and obsolescence The chapters use real-life scenarios from integrated circuit fabrication, electronic systems assembly, substrate fabrication, and electronic systems testing and support at various levels The chapters contain problems of varying levels of difficulty, ranging from alternative numerical values that can be used in the examples included in the chapter text to derivations of relations presented in the text and extensions of the models described Even for the simple problems, students may have to reproduce (via spreadsheet or other methods) the examples from the text before attempting the problems The notation (symbols) used in each chapter are summarized in the Appendix Every attempt has been made to make the notation consistent from chapter to chapter; however, some common symbols have different meanings in different chapters The author is grateful to many people who have made this a much better book with their input First, I want to thank the several hundred students who have taken courses at the University of Maryland and seem to somehow always find new and unique questions to ask every time it is taught My graduate students, present and past, deserve appreciation for Preface to the First Edition ix their contributions to many portions of the book In particular I would like to acknowledge Andre Kleyner (Delphi) and Linda Newnes (University of Bath) for their contributions reading and commenting on several of the chapters I would also like to thank my numerous colleagues at the University of Maryland and in CALCE, including Michael Pecht and Avi Bar-Cohen for encouraging the writing of this book Peter Sandborn 2013 b2530   International Strategic Relations and China’s National Security: World at the Crossroads This page intentionally left blank b2530_FM.indd 01-Sep-16 11:03:06 AM ... Disposal Financing (cost of money) Qualification/certification Refresh/Redesign Fig 1.4 The scope of cost analysis (after [Ref 1.5]) 8 Cost Analysis of Electronic Systems 1.4 Cost Modeling Definitions... the real cost of electronic products Various manufacturing cost analysis methods are included in the book: process-flow cost modeling and parametric, cost- of- ownership, and activity-based costing... total cost of ownership of the printer For products such as aircraft, the operation and support costs can represent as much as 80% of the total cost of ownership Since manufacturing cost and the cost