2596705883 - OC = operating costs Operating costs include...

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ME2004 Project(Design and Make) Project Economics and Cost Analysis 1. Economic considerations at the intermediate design level (depends upon whether it is “one of a kind” or mass produced) A. Selling price B. Operating costs C. Cost-saving activities 3. Estimation of selling price (SP) SP = IC + P where: IC = initial costs P = profit 4. What is included in IC? A. Raw materials and overhead B. Purchased parts and overhead C. Production labor and overhead D. Inspection and quality control and overhead E. Support staff a. secretarial and clerical b. engineers and draftsmen c. computers F. Development costs a. equipment and special tooling, engineering b. advertising and sales and marketing G. Long range overhead Cost of capital, management, facility maintenance and expansion, basic research, market analysis, customer relations, product liability protection, etc. 5. What is overall cost to buyer? (OVC) OVC = SP +OC where: SP = selling price
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Unformatted text preview: OC = operating costs Operating costs include such things as a. energy costs b. maintenance costs (scheduled and unscheduled) c. warranty and/or obsolescence costs 6. Areas of cost-saving activity A. Material selection B. Analytical methods stop calculating/start building C. Specifications a. tolerances b. surfaces finishes, etc. c. manufacturing processes D. Standardization (minimum no. of sizes of parts) E. Other specifics to area of design 1 7. Detailed estimation of selling price SP = IC + P 5% < P < 30% of IC IC = (IC) (M/A) 5% < M/A < 20% of IC where IC = initial cost excluding miscellaneous + administration overhead IC = (MC + OH) + (PP + OH) + (PL + OH) + (E/D + OH) 10% 10% 75-150% 25-100% where: MC = material cost PP = purchased parts PL = production labor E/D = engineering/drafting OH = overhead 2...
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This note was uploaded on 04/06/2010 for the course ME ME2004 taught by Professor Dr.yuen during the Spring '10 term at NYU Poly.

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2596705883 - OC = operating costs Operating costs include...

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