Development of a production cost estimation framework for product family design

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Abstract

The main task of a product family designer is to decide the right components/design variables to share among products to maintain economies of scale with minimum sacrifice in the performance of each product in the family. The decisions are usually based on several criteria, but production cost is of primary concern. Estimating the production cost of a family of products involves estimating the production cost of each product in the family including the cost effects of common and variant components/design variables in the family. In this paper, we introduce a production cost estimation framework for product family design based on Activity-Based Costing (ABC), which is composed of three stages: (1) allocation, (2) estimation, and (3) analysis. In the allocation stage, the production activities that are necessary to produce all of the products in the family are identified and modeled with an activity table, a resource table, and an activity flow. To allocate the activities to products, a product family structure is represented by a hierarchical classification of the items that form the product family. In the estimation stage, production costs are estimated by converting the production activities to costs using key cost drivers that consume main resources. In the analysis stage, components/design variables for product family design are investigated with resource sharing methods through activity analysis. As an example, the proposed framework is applied to estimate the production cost of a family of cordless power screwdrivers.

Original languageEnglish (US)
Pages257-266
Number of pages10
StatePublished - Dec 1 2004
Event2004 ASME Design Engineering Technical Conferences and Computers and Information in Engineering Conference - Salt Lake City, UT, United States
Duration: Sep 28 2004Oct 2 2004

Other

Other2004 ASME Design Engineering Technical Conferences and Computers and Information in Engineering Conference
CountryUnited States
CitySalt Lake City, UT
Period9/28/0410/2/04

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All Science Journal Classification (ASJC) codes

  • Modeling and Simulation
  • Mechanical Engineering
  • Computer Science Applications
  • Computer Graphics and Computer-Aided Design

Cite this

Park, J., & Simpson, T. W. (2004). Development of a production cost estimation framework for product family design. 257-266. Paper presented at 2004 ASME Design Engineering Technical Conferences and Computers and Information in Engineering Conference, Salt Lake City, UT, United States.