Development of a production cost estimation framework to support product family design

J. Park, T. W. Simpson

Research output: Contribution to journalArticle

79 Scopus citations

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 both estimating the production cost of each product in the family and the costs incurred by common and variant components/design variables in the family. To estimate these costs consistently and accurately, we propose a production cost estimation framework to support product family design based on activity-based costing (ABC), which consists of three stages: (1) allocation, (2) estimation, and (3) analysis. In the allocation stage, the production activities and resources needed to produce the entire products in a family are identified and classified with an activity table, a resource table, and a production flow. To help allocate product data for production, a product family structure is represented by a hierarchical classification of products that form the product family. In the estimation stage, production costs are estimated with cost estimation methods selected based on the type of information available. In the analysis stage, components/design variables possible 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 that share different components within the family.

Original languageEnglish (US)
Pages (from-to)731-772
Number of pages42
JournalInternational Journal of Production Research
Volume43
Issue number4
DOIs
StatePublished - Feb 15 2005

All Science Journal Classification (ASJC) codes

  • Strategy and Management
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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