MIE 754 - Class #12
Download
1 / 19

MIE 754 - Class #12 Manufacturing & Engineering Economics - PowerPoint PPT Presentation


  • 74 Views
  • Uploaded on

MIE 754 - Class #12 Manufacturing & Engineering Economics. Concerns and Questions Quick Review Today’s Focus: Chap 5 Estimating for Economic Analyses Hmwk #6 Due in 1 Week: Chap 5 - 3(e), 4, 6, 9, 13, 17, 23, 26. Concerns and Questions?. Term Project - distributed in 1-2 weeks

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'MIE 754 - Class #12 Manufacturing & Engineering Economics' - kay


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Mie 754 class 12 manufacturing engineering economics

MIE 754 - Class #12 Manufacturing & Engineering Economics

  • Concerns and Questions

  • Quick Review

  • Today’s Focus:

    • Chap 5 Estimating for Economic Analyses

  • Hmwk #6 Due in 1 Week:

    • Chap 5 - 3(e), 4, 6, 9, 13, 17, 23, 26


Mie 754 class 12 manufacturing engineering economics

Concerns and Questions?

  • Term Project - distributed in 1-2 weeks

  • Mid-Term Exam - to be determined (approx 2-3 weeks)


Quick recap of previous class
Quick Recap of Previous Class

  • Concurrent Engineering

  • Paradigm Shift

  • Design Process

  • Pugh Method

  • QFD Process and House of Quality

  • Other design techniques (for improved quality, reduced costs, reduced time to market)


Estimating for economic analyses
Estimating for Economic Analyses

  • What is a cost estimate?

    • A forecast of expenses (and revenues) that may be incurred in the manufacture of a product (or the delivery of a service).


What is the purpose of a cost estimate
What is the purpose of a cost estimate?

  • Provide information used in setting a selling price (quotation, bidding, or evaluating contracts)

  • Determine whether a proposed product can be made and distributed at a profit

  • Basis for make versus buy decisions (parts and assemblies)


What is the purpose of a cost estimate1
What is the purpose of a cost estimate?

  • Determine how much can be invested in tooling and equipment and/or to compare various manufacturing methods

  • Basis for cost reduction and value engineering


What is the purpose of a cost estimate2
What is the purpose of a cost estimate?

  • New products/designs:

    • Determine personnel requirements

    • Predict material needs for production runs

    • Setting overall schedule for meeting goals

    • Specifying equipment, machines, and facilities for manufacturing the desired product on time and in the numbers required



Sources of data
Sources of Data

  • Accounting Records

  • Other Sources Within the Firm

  • Sources Outside the Firm

  • Research & Development


Quantitative estimating techniques
Quantitative Estimating Techniques

1.Time-series - when cost (revenue) elements are a function of time. Collect data; study underlying relationships.

  • Regression - estimating causal relationships within time-series data

  • Exponential Smoothing - estimating future extensions to historical data patterns


Quantitative estimating techniques1
Quantitative Estimating Techniques

2.Subjective- expert judgment is applied to the results of time-series techniques (how future might differ from the past)

  • Delphi Technique - voice opinions anonymously and through an intermediary

  • Technology Forecasting - procedures for data collection and analysis to predict future technological developments and their impacts


Quantitative estimating techniques2
Quantitative Estimating Techniques

3.Cost Engineering - identify and utilize various revenue/cost drivers to compute estimates


Correlation and regression analysis
Correlation and Regression Analysis

  • Looking for explainable association between variables

  • Fit line through data (estimate a and b) to minimize squared error

    y = a + bx

    b=

    a=


Mie 754 class 12 manufacturing engineering economics

What if relationship is not linear?

Good reference:

Makridakis, S. and Wheelwright, S. Forecasting Methods and Applications, John Wiley & Sons.


Mie 754 class 12 manufacturing engineering economics

Correlation Coefficient - relative measure of the association between two variables

(-1r1)

r =

r = 0 no correlation

r =  1 perfect correlation


Example problem 5 5
Example Problem 5-5:

Operating costs Production volume

($M) (hundreds of units)

800 10.0

1,000 11.0

700 9.0

600 8.5

  • Determine regression line

  • Estimate oper costs for 950 units

  • Calc coeff of correlation (good fit?)


Exponential smoothing
Exponential Smoothing

  • Assumes trends and patterns of the past will continue into the future

  • More weight on current data

  • No assumption of linearity

    with ’= smoothing constant,

    St = ‘xt + (1 - ‘)St-1 (0’1)

    Usually (0.01’0.30)


Mie 754 class 12 manufacturing engineering economics

(Forecast for period t+1,

made in period t) =

’(Actual data point in period t)

+ (1-’)(Forecast for period t,

made in period t-1)

’ = 1 implies?

’ = 0 implies?


Example problem 5 8
Example Problem 5-8

  • Worked In Class