Data of a manufacturer of small hydraulic turbines

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Unformatted text preview: sign Example (cont’d) •  Step 5: Observe the plots: Which factor is not important? S/N larger the beher, or the other way around? •  Step 6: Obtain the opOmum seWng of the control parameters Cost EvaluaOon •  Why is it useful? –  InformaOon  Selling price / QuotaOon; –   The most economical method, process, or material (4 manufacturing); –  Basis 4 cost ­reducOon; –   Standards of producOon performance 4 control costs –  Input  Profitability of a new product Categories of Costs What are the costs? •  Fixed costs (period costs): Over a period of Ome regardless of the amount (volume) made or sold •  General and administraOve expenses (Q&A expenses): Categories of Costs (cont’d) •  Variable costs (product costs): costs that vary with each unit of product made –  –  –  –  –  –  –  –  –  Materials Direct labor (including fringe bene...
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