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IENG 217 Cost Estimating for Engineers

IENG 217 Cost Estimating for Engineers. Product Estimating . Product Methods. Learning Operations Planning Bill of Material Method of profit and loss. Learning Theory.

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IENG 217 Cost Estimating for Engineers

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  1. IENG 217Cost Estimating for Engineers Product Estimating

  2. Product Methods • Learning • Operations Planning • Bill of Material • Method of profit and loss

  3. Learning Theory • Person-hours or cost necessary to complete a unit will decrease by a constant percentage each time the manufacturing quantity is doubled.

  4. Learning Theory • Now consider the cost per unit is $100 for 1 unit produced and $80 for 2 units produced.

  5. Learning Theory

  6. Learning Theory

  7. Class Problem • A company audits to production units for an engine machining process. The 20th unit requires 120 hours of total machining time while the 40th unit requires 90 hours of total machining time. Estimate the time it will take to machine the 80th unit.

  8. Class Problem

  9. Engineering Costs

  10. Engineering Costs

  11. Information Needed • Engineering bill of materials • Due date for completion • Quantity, rate of production, etc. • Special test, inspection • Packaging & shipping information • Marketing information

  12. Bill of Material

  13. Bill of Material

  14. Product Estimate • Productive hour cost model • Activity Based Costing • Learning Model

  15. Productive hour cost model

  16. Productive hour cost model

  17. Example

  18. Example From below

  19. = + H SU ( N x H / 60 ) c l = + . 75 87 ( 31 . 561 / 60 ) = 46 . 51 hrs Example

  20. = PHC lot hours x prod hr cos t rate = 46 . 51 ( 32 . 19 ) = $1 , 497 . 27 Example

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