Cost Analysis and Estimating - anvari.net
Transcript of Cost Analysis and Estimating - anvari.net
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Ch 1-1
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Cost Analysis and Estimatingfor Engineering and Management
Chapter 1
Importance
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Ch 1-2
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Overview�The Design Process�Economic Evaluations
−Users−Results−Reasons
�Business Strategies� Information� International Business
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Ch 1-3
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Reasons for Study
�The Goal of Business Is to MakeMoney
�Desire to Know Outcome BeforeMaking a Commitment
�Need for Cost and Price Estimates
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Ch 1-4
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Design
�Every Design Is a New Combination ofPre-Existing Knowledge that Satisfiesan Economic Want−New Combination – Creativity
−Economic Want – Driver
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Ch 1-5
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Elements of Design
� Identification and Definition of Problem
�Development of Concepts
�Engineering Models
�Evaluation
�Design
� Implementation
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Ch 1-6
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
EngineeringDesignProcess
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Ch 1-7
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Problem
�Recognize a Need−Economic Want
�Good Description = Good Solution
�Detailed Specification of Requirements
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Ch 1-8
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Concept
�New Combinations of ExistingKnowledge
�Need to Collect a Lot of Knowledge−Relative to the Problem
�Unrestricted Generation of Concepts
�Then Select and Refine
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Ch 1-9
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Engineering Models
�Representation to Explain an Aspect
�Prediction
�Discover Pertinent Parameters
�Flexibility
�Simplistic
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Ch 1-10
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Evaluation
�Compromise
� Iterative Process with Modeling
�Satisfies Requirements?
�Cost
�Profit
�Fit with Capabilities
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Ch 1-11
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Sources of Cost
�Largely Determined by Design
�50% Purchased Material / Parts
�30% Overhead
�15% Factory Labor
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Ch 1-12
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Design
� Addresses All Requirements through−Computing−Drafting−Checking
� Answers−What It Looks Like−How Shall It Be Built−How Will It Work
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Ch 1-13
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Implementation
�Requires a Decision to Proceed
�Must Be Assured:−It Satisfies All Requirements
−It Will Yield a Profit
�Needs an Economic Evaluation
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Ch 1-14
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Economic Evaluation
�Market Defines “Economic Want”
�Cost Needs to Satisfy
�Cost Model Should Parallel the Design
�Detail and Accuracy of Estimate−Depends on Amount of Info Available
−Depends on the Time for the Estimate
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Ch 1-15
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Users
� Economic Evaluation Produces:−Dollar Estimates−Labor Hour Estimates−Material Requirements
� Used By:−Engineering –Manufacturing−Marketing –Materials Mgmt.−Accounting/Financial Planning
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Ch 1-16
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Results from Economic Evaluation
�Requires Answers to 2 Questions−“What Does It Look Like?”
−“How Many?”
�Selects from Design Alternatives
�Determines Manufacturing Methods
�Decisions to Proceed
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Ch 1-17
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Other Reasons� Cost to Manufacture
� Profit Prediction
� Labor Requirements
� Time (Scheduling)
� Control of Operations
� Improvement
� Budgets
� Equipment Justification
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Ch 1-18
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Strategies
�Mass Production−Large Quantities / Little Variation
�Batch Production−Smaller Quantities / Large Variation−Similar Processes
�Projects−Very Small Quantities / Specialized
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Ch 1-19
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Strategies
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Ch 1-20
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
What Determines Cost and When
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Ch 1-21
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Modes of Competition� Design Uniqueness or Superiority
� Price and Cost
� Quality
� Reliability
� Innovation / First to Market
� Customer Support
� Custom Design / Manufacturing
� Commodity Products
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Ch 1-22
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Business Classification
� TraditionalEstablished Products
Slow Evolution
Incremental Changes
History of Costs
� High-TechRapid Changes
Short Cost RecoveryPeriod
Fast Time to Market
Flexibility
Concurrent Engineering
Challenging Cost Analysis
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Ch 1-23
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Information
�Available Information Varies−By Point in the Development
−Amount of Uniqueness of Product
�Historical Data (Accounting Records)
�Measured Data
�Policy Data
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Ch 1-24
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Sources of Information
� Accounting
� Personnel Department
� Operating Departments
� Purchasing
� Sales/Marketing
� Supervisors/Managers
� Trade Associations / Media
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Ch 1-25
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
About the Estimate
�Amount of Information Available
�Time Allotted to Make the Estimate
�Overall Size (Amount) of the Estimate
� Intended Use for the Estimate
�All Impact the Quality and Accuracy ofthe Estimate
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Ch 1-26
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
International Business
�Global Economy−Competitors
−Markets
�Measurements in SI Units
�Monetary Transactions in MultipleCurrencies
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Ch 1-27
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Currency Exchange
�Exchange Rates−Conversion Factors
−Constantly Varying
�Spot and Future Rates
�Rates Obtained from:−Banks, Newspapers, Internet
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Ch 1-28
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Effects of Exchange Rates
� Strong DollarImport Goods Cost
LessExport Goods Cost
More – Lose toForeignCompetition
Requires Price Cuts
� Weak DollarExpensive ImportsExports Are More
CompetitiveHigher Trade and
Budget DeficitsOverall – Worse for
the U.S. Economy
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Ch 1-29
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Significant Digits
�Addition and Subtraction−Round to 1 Significant Digit to the Right ofthe Number with the Least Significant Digits
�Multiplication and Division−No More Significant Digits than theNumber with the Least Significant Digits
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Ch 1-30
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Layout of the Book
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Ch 1-31
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
The Book
�Chapter 1 – Introduction
�Chapter 2 – Labor Calculations
�Chapter 3 – Material Calculations
�Chapter 4 – Accounting Practice
�Chapter 5 – Statistics and Indexing for
Forecasting
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Ch 1-32
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
The Book
�Chapter 6 – Estimating Methods�Chapter 7 – Operation Estimating�Chapter 8 – Product Estimating�Chapter 9 – Cost Analysis�Chapter 10 – Engineering Economy�Chapter 11 – Enterprise and
Entrepreneurship
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Ch 1-33
© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Summary
�How the Design Process Works
�Where Economic Analyses Fit
�How Businesses Are Organized andCompete
�The Role of Information
�Global Aspects