3.

042 Materials Project Laboratory

Cost Estimating
Critical for: a) Determining whether to make an investment to provide a product for the consumer market b) Deciding if a company should quote on a product for sale to another company

3.042 Materials Project Laboratory

Purpose of Estimating
1.
2. 3. 4. 5.

6.

7.

Establish the bid price of a product for a quotation or contract. Verify quotations submitted by suppliers. Ascertain whether a proposed product can be manufactured and marketed profitably. Provide data for make-versus-buy decisions. Help determine the most economical method, process, or material for manufacturing a product. Provide a temporary standard for production efficiency and guide operating costs at the beginning of a project. Help in evaluating design proposals.

3.042 Materials Project Laboratory

Preliminary Product Cost Estimates

Often used to compare different concepts of product designs or manufacturing processes Typically, this type of estimate is wanted almost immediately and there is no time for a detailed analysis

3.042 Materials Project Laboratory

Final Product Cost Estimates

Include costing of every part and subassembly going into a product Include the results of detailed studies on the optimum manufacturing processes and make-versus-buy decisions When the product is released for production, information from the detailed product cost estimate is directly used in establishing standard costs and ordering necessary tools and equipment

cost@cranfield.ac.uk

Data Structure
Cost Estimate Labour Labor
Labour Categories General Manufacturing Forging & Foundry Chemical Electrical Plastics Rubber & Plastics Glass Elastomer Rubber Tooling Materials

Material
Ferrous Metals Non-Ferrous Metals Chemicals Petroleum Products

Machine
Assembly Welding Plastic Fabrication Boring Drilling & Reaming Soldering & Brazing Exhaust Systems Fabrication Rubber Fabrication Soft Trim Fabrication Wiring Fabrication Robots Inspection Equipment Test Equipment Abrasive Finishing Cleaning Equipment Heat Treating

Out Sourced Overhead Bought Out

Adhesive Part Bolt Connector Electronic Component Washer Hose Clamp Nut Pin Retaining Ring Retainer & Clip Rivet Screw Shielding Component Spring Stud Manufacturin g Burden Fringe Benefits Mark-ups Indirect Labour Cost

Textile
General Labour & Wiring Aluminium Foundry Robots Tool-room Source Country

Plastics Paper Materials Leathers Non-Metallic Textiles Applied Finishes Electrical Misc. Materials

cost@cranfield.ac.uk

Category of Ferrous Materials

Alloy steel bar Carbon steel bar High Temperature steel bar Stainless Steel Bar Cast Iron Cast Steel Powdered Metal Ferrous Sheet steel
6

cost@cranfield.ac.uk

Some Details on Ferrous Metals

Country of origin, currency Trade discount Reclaimed Scrap New alloy Melt temperature Thermal conductivity, etc.
7

cost@cranfield.ac.uk

Machine Costs Data

Equipment Description Manufacturer Current Date Supplier Capital Cost Depreciation Interest

Date of Purchase
Installation Cost Restricted Width

Residual Cost

Restricted Length Lifetime

Maintenance Floor Space

Floor space Area

Electricity Usage Interest on Capital Source Country Tonnage Capacity

Insurance on Machine Uptime Indirect Material

Gas Usage Manning Level Special Handling Dry Cycle

Tool Cleaning

Distance Between column x Distance Between column y

8

Litre Shot Size

Lock pressure
Shot Weight

Max. Diameter

Max. Weight In Screw Speed

cost@cranfield.ac.uk

Categories of Overheads
Plant supervisor Plant administrator Plant engineer Quality control Production control Laboratory Health department Maintenance Work safety Plant security etc.