IE_370_Updated_PowerPoint_Slides_2_

IE_370_Updated_PowerPoint_Slides_2_ - IE 370 Engineering...

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© 2008 H. R. Leep, PhD 1 IE 370 Engineering Economic Analysis H.R. Leep, PhD, PE Professor Department of Industrial Engineering University of Louisville Louisville, KY 40292 USA (502) 852-0091 [email protected]
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© 2008 H. R. Leep, PhD 2 Life-Cycle Costs First Cost (usually nonrecurring) may include: Purchase price of item Training costs Shipping and installation costs Tooling Costs Supporting equipment costs
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© 2008 H. R. Leep, PhD 3 Life-Cycle Costs First Cost Example-CNC machine $30,000 Purchase Price of Equipment 1,500 Training Costs 2,500 Shipping Costs and Installation Costs 6,000 Tooling Costs 10,000 Supporting Equipment Costs $50,000 Total Costs
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© 2008 H. R. Leep, PhD 4 TC=DC+BC TC=FC+VC DC=Direct Costs – labor and materials BC=Burden Costs – overhead, indirect labor and materials FC=Fixed Costs VC=Variable Costs TC=Total Costs DC ~ VC
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© 2008 H. R. Leep, PhD 5 Operating and Maintenance (O&M) Costs are recurring costs. Operating Costs
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This note was uploaded on 05/12/2008 for the course IE 370 taught by Professor Leep during the Summer '08 term at University of Louisville.

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IE_370_Updated_PowerPoint_Slides_2_ - IE 370 Engineering...

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