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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 217Cost Estimating for Engineers Product Estimating
Product Methods • Learning • Operations Planning • Bill of Material • Method of profit and loss
Learning Theory • Person-hours or cost necessary to complete a unit will decrease by a constant percentage each time the manufacturing quantity is doubled.
Learning Theory • Now consider the cost per unit is $100 for 1 unit produced and $80 for 2 units produced.
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.
Information Needed • Engineering bill of materials • Due date for completion • Quantity, rate of production, etc. • Special test, inspection • Packaging & shipping information • Marketing information
Product Estimate • Productive hour cost model • Activity Based Costing • Learning Model
Example From below
= + H SU ( N x H / 60 ) c l = + . 75 87 ( 31 . 561 / 60 ) = 46 . 51 hrs Example
= PHC lot hours x prod hr cos t rate = 46 . 51 ( 32 . 19 ) = $1 , 497 . 27 Example