AN activity-based costing method for product family design in the early of development

Research output: Chapter in Book/Report/Conference proceedingConference contribution

8 Scopus citations

Abstract

As the marketplace is changing so rapidly, it becomes a key issue for companies to best meet customers' diverse demands by providing a variety of products in a cost-effective and timely manner. In the meantime, an increasing variety of capability and functionality of products has made it more difficult for companies that develop only one product at a time to maintain competitive production costs and reclaim market share. By designing a product family based on a robust product platform, overall production cost can be more competitive than competitors selling one product at a time while delivering highly differentiated products. In order to design cost-effective product families and product platforms, we are developing a production cost estimation framework in which relevant costs are collected, estimated, and analyzed. Since the framework is quite broad, this paper is dedicated to refining the estimation framework in a practical way by developing an activity-based costing (ABC) system in which activity costs are mapped to individual parts in the product family, which is called cost modularization, and the activity costs affected by product family design decisions are reconstructed to make the costs relevant to these decisions. A case study involving a family of power tools is used to demonstrate the proposed use of the ABC system.

Original languageEnglish (US)
Title of host publicationProceedings of the ASME International Design Engineering Technical Conferences and Computers and Information in Engineering Conferences - DETC2005
Subtitle of host publication31st Design Automation Conference
Pages959-968
Number of pages10
Volume2 B
StatePublished - Dec 1 2005
EventDETC2005: ASME International Design Engineering Technical Conferences and Computers and Information in Engineering Conference - Long Beach, CA, United States
Duration: Sep 24 2005Sep 28 2005

Other

OtherDETC2005: ASME International Design Engineering Technical Conferences and Computers and Information in Engineering Conference
CountryUnited States
CityLong Beach, CA
Period9/24/059/28/05

All Science Journal Classification (ASJC) codes

  • Engineering(all)

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    Park, J., & Simpson, T. W. (2005). AN activity-based costing method for product family design in the early of development. In Proceedings of the ASME International Design Engineering Technical Conferences and Computers and Information in Engineering Conferences - DETC2005: 31st Design Automation Conference (Vol. 2 B, pp. 959-968)