Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Cost Analysis and Estimating for
Trang 1Ch 9-1
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Cost Analysis and Estimating
for Engineering and Management
Chapter 9 Cost Analysis
Trang 2 Making Decisions (Tradeoffs)
Cash Flow Effects
Variations on Breakeven Analysis
Marginal Costs, Revenues, Profits
Life Cycle Costs
Trang 3Ch 9-3
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Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Tradeoffs
Make or Buy
Often Before or During Design
Trang 4Product Development
Trang 5Ch 9-5
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Tradeoff Study
Search for Alternatives
Determine Cost Estimates
Consider Constraints
Understand Irreducible Factors
Trang 6Considering Cash Flow
Amount and Timing of Cash
Coming In, From Sales
Going Out, In Expenses
Depreciation
Taxes
Inflation/Deflation
Trang 7Ch 9-7
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Taxation Effects on Cash Flow
Trang 8on depreciati -
es) expenditur capital
(except expenses
all -
income gross
= income Taxable
Trang 9Ch 9-9
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Graduated Tax Schedule
Trang 10Inflation/Deflation
“Value” of Dollar Changes
Purchasing Power
Quantized Through Indices
Eq 9.3
1
1 n k
a r
f
D D
Trang 11Ch 9-11
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Calculating Cash Flow
Usually for Annual Basis
Only for Top/High Level
Trang 13Ch 9-13
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Linear Cost Case
Fixed Cost Is Constant for Period
Does Not Change with Quantity
Variable Cost Is Linear
Constant per Unit Cost
No Production, No Variable Cost
Trang 15Ch 9-15
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Breakeven Point
For Linear Variable Cost
Higher Quantities Reduce Fixed Cost per Unit
Eq 9.9
v v
f BE
C R
C n
Trang 16Breakeven Chart
Trang 17Ch 9-17
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Per Unit Chart
Trang 19Ch 9-19
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Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Process Comparison
Trang 20Make or Buy
Trang 21Ch 9-21
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Material Cost Reduction
Trang 22Tax Effects
Trang 23Ch 9-23
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Semi-Fixed Costs
Cost Changes In Steps
Changes Infrequent During Scope
Add Another Shift
Add Another Machine/Line
Total Cost
Eq 9.10
v sf
f
Trang 24Semi-Fixed Cost Chart
Trang 25Ch 9-25
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Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Semi-Fixed per Unit Chart
Trang 26Nonlinear Cost
Per Unit Variable Cost Is Not Constant
Add Nonlinear Variable and Fixed Costs
Divide By Number of Units to Get
Average Unit Cost
Trang 27Ch 9-27
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Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Trang 28Marginal Cost, Revenue, Profit
Associated with an Additional Unit of Production
Marginal Cost = C T / n
Marginal Revenue = R T / n
Marginal Profit = R T / n - C T / n
Trang 29Ch 9-29
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Product Analysis
n
Marginal Cost
Marginal Revenue
Marginal Profit 0
Trang 30Total Revenue and Cost
Trang 31Ch 9-31
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Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Marginal Plots
Trang 32Revised Breakeven Analysis
Find Linear Approximation for
R C
Trang 33Ch 9-33
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Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Linear Breakeven
Trang 34Higher Order Solutions
To Fit Some Data Higher Order
Polynomial Regression Is Needed
Using Derivation of Regressed Models
dn
dC
dn dR
Trang 35Ch 9-35
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Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Nonlinear Cost & Revenue
Trang 36Marginal Plots
Trang 37Ch 9-37
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Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Consequences
Minimum & Maximum Production Limits
Marginal Profit = Zero
Optimum
Sales Revenue, Production Cost, Profit
But Not All at the Same Point
Eq 9.17
0
dR dn
Trang 38Life Cycle Cost
Considers Costs for Entire Life
Trang 39Ch 9-39
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
LCC Use
Used for Comparing Alternatives
Initial Cost and Operating /Use Cost
For Example
High Cost, Reliable Item
Low Cost, More Repair / Replacement
Pay Now or Pay Later
Trang 40Estimates Required for LCC
Trang 41Ch 9-41
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Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Phases of Project Life
Trang 42 Purpose No Longer Exists
Superior Replacement Available
Trang 43Ch 9-43
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Operating & Maintenance Costs
=
actions
PM
SOH PM
Trang 44Breakdown Costs
Eq 9.19
MTBF SOH
C
Trang 45Ch 9-45
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Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
LCC Comparison
Trang 46Long Life Costs
Life in Multiple Years
Interest Rate Considerations
Time Value of Money
$1 in 5 Years Is Worth Less Today
Impacts LCC Calculations
Covered In Chapter 10
Trang 47Ch 9-47
© 2004 Pearson Education, Inc.
Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Summary
Methods for Making Tradeoff Decisions
Considerations Involving Cash Flow
Marginal Costs, etc.
Limits on Production
Costs for Entire Life Cycle