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Cost Estimating

3.042 Materials Project Laboratory. Cost Estimating. Critical for: Determining whether to make an investment to provide a product for the consumer market Deciding if a company should quote on a product for sale to another company. 3.042 Materials Project Laboratory. Purpose of Estimating.

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Cost Estimating

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  1. 3.042 Materials Project Laboratory Cost Estimating Critical for: Determining whether to make an investment to provide a product for the consumer market Deciding if a company should quote on a product for sale to another company

  2. 3.042 Materials Project Laboratory Purpose of Estimating • 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. 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

  4. 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

  5. cost@cranfield.ac.uk Machine Out Sourced Overhead Labor Material Data Structure Cost Estimate Overhead Labour Material Machine Bought Out

  6. 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

  7. Country of origin, currency Trade discount Reclaimed Scrap New alloy Melt temperature Thermal conductivity, etc. cost@cranfield.ac.uk Some Details on Ferrous Metals

  8. cost@cranfield.ac.uk Machine Costs Data

  9. Plant supervisor Plant administrator Plant engineer Quality control Production control Laboratory Health department Maintenance Work safety Plant security etc. cost@cranfield.ac.uk Categories of Overheads

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