Development of a Production Cost Estimation Framework for Product Family Design

2004 ◽  
Author(s):  
Jaeil Park ◽  
Timothy W. Simpson
Keyword(s):  
Cost Estimation ◽  
Production Cost ◽  
Economies Of Scale ◽  
Product Family ◽  
Production Costs ◽  
Main Task ◽  
Primary Concern ◽  
Product Family Design ◽  
Design Variables ◽  
The Family

The main task of a product family designer is to decide the right components/design variables to share among products to maintain economies of scale with minimum sacrifice in the performance of each product in the family. The decisions are usually based on several criteria, but production cost is of primary concern. Estimating the production cost of a family of products involves estimating the production cost of each product in the family including the cost effects of common and variant components/design variables in the family. In this paper, we introduce a production cost estimation framework for product family design based on Activity-Based Costing (ABC), which is composed of three stages: (1) allocation, (2) estimation, and (3) analysis. In the allocation stage, the production activities that are necessary to produce all of the products in the family are identified and modeled with an activity table, a resource table, and an activity flow. To allocate the activities to products, a product family structure is represented by a hierarchical classification of the items that form the product family. In the estimation stage, production costs are estimated by converting the production activities to costs using key cost drivers that consume main resources. In the analysis stage, components/design variables for product family design are investigated with resource sharing methods through activity analysis. As an example, the proposed framework is applied to estimate the production cost of a family of cordless power screwdrivers.

Production Cost Modeling to Support Product Family Design Optimization

2003 ◽  
Author(s):  
Jaeil Park ◽  
Timothy W. Simpson
Keyword(s):  
Production Cost ◽  
Cost Model ◽  
Product Family ◽  
Optimization Methods ◽  
Production Costs ◽  
Product Platform ◽  
Product Family Design ◽  
The Family ◽  
The Individual ◽  
Decision Based Design

Product family design involves carefully balancing the commonality of the product platform with the distinctiveness of the individual products in the family. While a variety of optimization methods have been developed to help designers determine the best design variable settings for the product platform and individual products within the family, production costs are thought to be an important criterion to choose the best platform among candidate platform designs. Thus, it is prerequisite to have an appropriate production cost model to be able to estimate the production costs incurred by having common and variant components within a product family. In this paper, we propose a production cost model based on a production cost framework associated with the manufacturing activities. The production cost model can be easily integrated within optimization frameworks to support a Decision-Based Design approach for product family design. As an example, the production cost model is utilized to estimate the production costs of a family of cordless power screwdrivers.

An Activity-Based Costing Method for Product Family Design in the Early Stages of Development

2005 ◽  
Author(s):  
Jaeil Park ◽  
Timothy W. Simpson
Keyword(s):  
Cost Estimation ◽  
Production Cost ◽  
Product Family ◽  
Cost Effective ◽  
Production Costs ◽  
Activity Based Costing ◽  
Product Family Design ◽  
Product Families ◽  
Product Platforms ◽  
Activity Costs

As the marketplace is changing so rapidly, it becomes a key issue for companies to best meet customers’ diverse demands by providing a variety of products in a cost-effective and timely manner. In the meantime, an increasing variety of capability and functionality of products has made it more difficult for companies that develop only one product at a time to maintain competitive production costs and reclaim market share. By designing a product family based on a robust product platform, overall production cost can be more competitive than competitors selling one product at a time while delivering highly differentiated products. In order to design cost-effective product families and product platforms, we are developing a production cost estimation framework in which relevant costs are collected, estimated, and analyzed. Since the framework is quite broad, this paper is dedicated to refining the estimation framework in a practical way by developing an activity-based costing (ABC) system in which activity costs are mapped to individual parts in the product family, which is called cost modularization, and the activity costs affected by product family design decisions are reconstructed to make the costs relevant to these decisions. A case study involving a family of power tools is used to demonstrate the proposed use of the ABC system.

A Product Dissection-Based Methodology to Benchmark Product Family Design Alternatives

2009 ◽  
Vol 131 (4) ◽  
Author(s):  
Henri J. Thevenot ◽  
Timothy W. Simpson
Keyword(s):  
Product Family ◽  
Cost Savings ◽  
Production Costs ◽  
Manufacturing Cost ◽  
Successful Implementation ◽  
Product Family Design ◽  
Potential Cost ◽  
Product Families ◽  
Product Platforms ◽  
Design Alternatives

Today’s companies are pressured to develop platform-based product families to increase variety, while keeping production costs low. Determining why a platform works, and alternatively why it does not, is an important step in the successful implementation of product families and product platforms in any industry. Internal and competitive benchmarking is essential to obtain knowledge of how successful product families are implemented, thus avoiding potential pitfalls of a poor product platform design strategy. While the two fields of product family design and benchmarking have been growing rapidly lately, we have found few tools that combine the two for product family benchmarking. To address this emerging need, we introduce the product family benchmarking method (PFbenchmark) to assess product family design alternatives (PFDAs) based on commonality/variety tradeoff and cost analysis. The proposed method is based on product family dissection, and utilizes the Comprehensive Metric for Commonality developed in previous work to assess the level of commonality and variety in each PFDA, as well as the corresponding manufacturing cost. The method compares not only (1) existing PFDAs but also (2) the potential cost savings and commonality/variety improvement after redesign using two plots—the commonality/variety plot and the cost plot—enabling more effective comparisons across PFDAs. An example of benchmarking of two families of valves is presented to demonstrate the proposed method.

Incorporating Security Considerations Into Optimal Product Architecture and Component Sharing Decision in Product Family Design

2010 ◽  
Author(s):  
Alvaro J. Rojas Arciniegas ◽  
Harrison M. Kim
Keyword(s):  
A Priori ◽  
Product Family ◽  
Third Party ◽  
Product Architecture ◽  
Decision Making Process ◽  
Sensitive Information ◽  
Product Family Design ◽  
Multiple Factors ◽  
Common Structure ◽  
The Family

Multiple factors affect the decisions of selecting the appropriate components to share in product family design. Some of the challenges that the designers face are maintaining uniqueness and the desired performance in each variant while taking advantage of a common structure. In this paper, the sharing decision making process is analyzed for the case when a firm knows a priori that some of the components contain sensitive information that could be exposed to the user, third-party manufacturers, or undesired agents; thence, it is important to enclose it and protect it. Two important aspects to consider are defining the architecture of the product while protecting the sensitive information. This paper proposes tools to help the designers to identify components that are candidates for sharing among the family and finds the most desirable component arrangement that facilitates sharing while protecting the sensitive information that has been previously identified. The proposed framework is applied to three printers in which the architecture used for the ink cartridges and printheads are significantly different. Third-party manufacturers and remanufacturers offer their own alternatives for these subsystems (ink cartridges and printheads) since the customer for printer supplies is always looking for a cheaper alternative; meanwhile, the OEMs attempt to secure their products and retain their customers with original supplies. Having identified the sensitive components for each printer, the optimal clustering strategy is found, as well as the set of components that are candidates for sharing, according to their connectivity and the security considerations.

A Variation-Based Methodology for Product Family Design

2000 ◽  
Author(s):  
Raviraj U. Nayak ◽  
Wei Chen ◽  
Timothy W. Simpson
Keyword(s):  
Product Family ◽  
Product Platform ◽  
Functional Requirements ◽  
Small Deviations ◽  
Second Stage ◽  
Performance Requirements ◽  
Input Design ◽  
Design Variables ◽  
The Family ◽  
The Common

Abstract In recent years, considerable research has been directed towards the development of methods for designing families of products. In this paper, we present a Variation-Based Platform Design Methodology (VBPDM), which aims to satisfy a range of performance requirements using the smallest variation of the product designs in the family. In the first stage of the VBPDM, the common product platform around which the product family is to be developed is identified. A ranged set of solutions is found, represented by the mean and standard deviation of the input design variables, to meet a range of the different performance requirements for the product family. During this first stage, a compromise Decision Support Problem (DSP) is used to optimize the commonality goal that seeks to minimize the deviation of the input design variables, while satisfying the range of performance requirements. Those design variables that show small deviations are held constant to form the product platform. In the second stage of the VBPDM, each individual product is designed around the common platform such that the functional requirements of the product are best satisfied. As an example, the proposed method is used to develop a family of universal electric motors designed to meet a range of torque requirements. The results are compared against previous work.

Optimal product family design with platform modularity and component sharing under uncertain environment

2021 ◽  
pp. 1-17
Author(s):  
Qinyu Song ◽  
Yaodong Ni ◽  
Dan Ralescu
Keyword(s):  
Theoretical Model ◽  
Economies Of Scale ◽  
Product Family ◽  
New Product ◽  
Optimal Solutions ◽  
Product Family Design ◽  
Maximum Profit ◽  
Sharing Strategy ◽  
End Products ◽  
Low Costs

The customer demands of various products bring a challenge for manufacturers. They have to design customized products while maintaining economies of scale and low costs. In this paper, to address this challenge, four approaches are argued to help companies find out the optimal solutions of products’ performance and the maximum profit: (i) only platform modularity without component sharing (ii) only component sharing without platform modularity, (iii) using both platform modularity and component sharing to develop products, or iv) the products are developed individually from a given unshared components set. A theoretical model is proposed and the most profitable approach is found to develop a whole new product family when uncertainty exists in the customer demand and economies of scale with pre-defined parameters. We find that, when consumers’ valuation is considered, the manufacturer may prefer to adopt platform or component sharing individually rather than combining them because the performance of high-end products using platform and component sharing strategies is worse than that using two strategies separately. If platform and component sharing are adopted, the high-end product is under designed, but the manufacturer can benefit from economies of scale. When economies of scale of the platform are greater than or equal to that of component sharing, the optimal performance level of low-end products under platform strategy is lower than that under component sharing strategy. Finally, the detailed numerical analysis provides support for the feasibility and effectiveness of the model.

Studi Pendahuluan Komparasi Kapasitas Produksi Pada UKM Batu Bata Berbasis Family Business

2021 ◽  
Vol 14 (1) ◽  
Author(s):  
Fauzan Romadlon ◽  
Alya Farahdina Alfiani ◽  
Nuansa Aita Putri ◽  
Wahyu Bagas Laksana
Keyword(s):  
Family Business ◽  
Cost Estimation ◽  
Statistical Significance ◽  
Production Capacity ◽  
Initial Step ◽  
Production Costs ◽  
The Family ◽  
Preliminary Study ◽  
The Cost

<p>This preliminary study aims to compare production capacity at the family business of bricks at Sokaraja District, Banyumas Regency. The majority of the businesses are done traditionally with family business managerial-based norms. The method used is the cost estimation analysis and the Analysis of Variance (ANOVA) method to calculate the statistical significance of production among SMEs. In addition, based on statistical analysis there are significant differences among the three bricks SMEs for production capacity. The implications of these calculations can be used as an initial step to consider in general determining the logistics conditions, sales strategies, and the role of succession in the family business. In practice, increasing production capacity, reducing production costs, and product innovation can be achieved if the involvement of family members were optimal to ensure and enhance the business’s sustainability.</p>

Optimal Design of Product Family Throughout Commonalization, Customization and Lineup Arrangement

2008 ◽  
Author(s):  
Kikuo Fujita ◽  
Ryota Akai
Keyword(s):  
Optimal Design ◽  
Design Problem ◽  
Product Family ◽  
Feasible Region ◽  
Product Family Design ◽  
Active Set ◽  
Active Set Strategy ◽  
Design Variables ◽  
Design Paradigm

Product family design is a framework for effectively and efficiently meeting with spread customers’ needs by sharing components or modules across a series of products. This paper systematizes product family design toward its extension to throughout consideration of commonalization, customization and lineup arrangement under the optimal design paradigm. That is, commonalization is viewed as the operation that restricts the feasible region by fixing a set of design variables related to commonalized components or modules against later customization and final lineup offered to customers. Customization is viewed as the operation that arranges lineup by adjusting another set of design variables related to reserved freedom for customers’ needs. Their mutual and bi-directional relationships must be a matter of optimal design. This paper discusses the mathematical fundamentals of optimal product family design throughout commonalization, customization and lineup arrangement under active set strategy, and demonstrates a case study with a design problem of centrifugal compressors for showing the meaning of throughout optimal design.

A Method for Benchmarking Product Family Design Alternatives

2007 ◽  
Author(s):  
Henri J. Thevenot ◽  
Timothy W. Simpson
Keyword(s):  
Product Family ◽  
Cost Savings ◽  
Production Costs ◽  
Manufacturing Cost ◽  
Successful Implementation ◽  
Product Family Design ◽  
Potential Cost ◽  
Product Families ◽  
Product Platforms ◽  
Design Alternatives

Today’s companies are pressured to develop platform-based product families to increase variety while keeping production costs low. Determining why a platform works, and alternatively why it does not, is an important step in the successful implementation of product families and product platforms in any industry. Internal and competitive benchmarking is essential to obtain knowledge of how successful product families are implemented, thus avoiding potential pitfalls of a poor product platform design strategy. While the two fields of product family design and benchmarking have been growing rapidly lately, we have found few tools that combine the two for product family benchmarking. To address this emerging need, we introduce the Product Family Benchmarking Method (PFBenchmark) to assess product family design alternatives (PFDAs) based on commonality/variety tradeoff and cost analysis. The proposed method utilizes the Comprehensive Metric for Commonality developed in previous work to assess the level of commonality and variety in each PFDA, as well as the corresponding manufacturing cost. The method compares not only (1) existing PFDAs but also (2) the potential cost savings and commonality/variety improvement after redesign using two plots — the Commonality/Variety Plot and the Cost Plot — enabling more effective comparisons across PFDAs. An example of benchmarking two families of valves is presented to demonstrate the proposed method.

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