Cost Modeling for Appliance Design

Cost Modeling for Appliance Design - About Whirlpool...

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About Whirlpool Corporation Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances, with annual sales of approximately $19 billion, 70,000 employees, and 68 manufacturing and technology research centers around the world. The company markets Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Bauknecht and other major brand names to consumers in nearly every country around the world. Additional information about the company can be found at . About Jason Lynn, Project Manager, Cost Modeling Jason Lynn works as a Project Manager for Cost Modeling with Whirlpool Corporation and manages an international cost modeling group. Prior to that, he worked as the electronic/electrical cost engineer for Maytag Corporation where he developed cost models with suppliers, provided cost visibility on new products, and identified costs of competitive products. Before Maytag, he spent 10 years in the quality control area of manufacturing for Arvin Automotive and Carrier Corporation in Indiana. Lynn holds a BS in Mechanical Engineering from Brigham Young University and an MBA with a focus on finance from Indiana University. Cost Modeling Cost modeling is the practice of understanding the cost structure of the products purchased or manufactured for the purpose of optimizing a design or supply chain. Whirlpool Corporation defines Cost Modeling as A process that mimics the costs of the production source. It identifies the cost drivers and serves as a basis for new product calculations and competitive comparisons.
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The Cost Modeling process is focused on supporting three business areas: target costing, procurement and competitive analysis. Target costing is a process to manage and optimize the value delivered to the customer. The target costing process relies on quick and accurate cost estimates to be able to optimize the new product design. The cost modeling process identifies cost drivers and facilitates informed development decisions. Procurement uses cost models as a cost verification and negotiation tool. The cost model gives them a breakdown of the costs to understand the competitiveness of the supply base and improve negotiations. The competitive analysis process uses cost modeling to accurately and quickly estimate the costs of competitive assemblies and make decisions for new products and existing product improvements. The cost model is developed with cost elements and variables. Cost elements are the major areas of cost such as material, labor and overhead. Cost variables are the components of the cost elements such as the material type, scrap and transportation cost. The cost variables for any product will need to be determined depending on the manufacturing method, supply chain and industrial norms. 2
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This note was uploaded on 02/18/2010 for the course ME 131 taught by Professor Baird during the Fall '09 term at BYU - ID.

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Cost Modeling for Appliance Design - About Whirlpool...

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