Cost Analysis and Estimating

for Engineering and Management

Chapter 7
Operation Estimating

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-1
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Overview
 FindTime/Cost for Production Steps
 Determine Direct Labor Time
 Look at a Metal Machining Example
-Set Up
-Cycle Time
 One Time Tooling Costs
 Overview of Flow Line Manufacturing

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-2
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Background
 “Design” Defines a Part
 Design Is Broken Down into Operations
 Operations are broken down into essential elements
 Labor & Material Determined
 Cost Estimated, using cost equations and
engineering performance data
 The activity is initiated by a Request for Quote, work
order, sales request, etc
 The operation estimating uses a microanalysis
approach which is subdividing a manufacturing
operation into physical and economics elements
 Cost of estimating is quite large and hence the
chance of winning/success must be considered
© 2004 Pearson Education, Inc.
Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-3
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Definitions
 Manufacturing Operations
- Produce Changes to Objects to Increase Value
 Cost
- Measure of the change in the change in worth
- For Utilization of Labor & Materials and tools to Increase
Value of Some Object
 Manufacturing operations require tools, fixtures, or
test equipment, they are refer to as non-recurring
initial fixed costs, or simply “tooling”. These are
also estimated

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-4
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Operation Estimates
 Establish Costs for Components and Assemblies
 Initiate Cost Reductions
 Provide Standards
 Compare Different Designs
 Support Decisions
 Verify operation quotations submitted by vendors
 Help determine the economic method, process, or
material for manufacturing a product

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-5
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Operation Cost Elements

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-6
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Industries

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-7
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Manufacturing Facts
 Average Lot Quantity - 100 Units
 Employs 16% of Population
 Declining as a Percentage
 Still Increasing in Absolute Numbers
 Productivity Is Exceedingly High

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-8
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
© 2004 Pearson Education, Inc.
Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-9
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Discrete Manufacturing
 Mass Production
- High Volume, Independent of Orders
 Moderate Production
- Large Volume, Connected to Orders, Fluctuates
 Job Lot
- Small Quantities (1-500)
 Discrete product manufacturing:
- Production of raw materials from earth, casting, forming,
machining, welding, finishing, assembly
- Setup time: work to prepare machine, process, bench to
produce parts or run pieces
- Cycle time (run time): work needed to complete one unit
after the set up is completed
© 2004 Pearson Education, Inc.
Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-10
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Operation
 Seriesof Elements
 Performed at a Single Workstation
-Machine, Bench, Process
 One or More Operations to Complete a
Part or Assembly to a Predetermined
State (per Drawing/Design)

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-11
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Machining
 TraditionalMetal Cutting
 Subject for Remaining Discussion
 Set Up
-Prepare Machine/Process
-Includes Return to Neutral Condition
 Cycle time
-Run Time to Complete One Unit
-Repeats
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-12
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Classic Operations Analysis
(Taylor Model)

LW= Load work

AT= Advance tool
RT= Retract tool
UW= Unload tool
© 2004 Pearson Education, Inc.
Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-13
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Classic Operations Analysis

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-14
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Modeling Machining Time
 SinglePoint Tool - Turning Operation
 Time (Cost) Is Function of:
-Handling Time
-Machining Time
-Tool Changing Time
-Tool Cost

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-15
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Handling Cost
 Load and Unload Work
 Constant
 Not Related to Cutting Time

handling cost = Co t h Eq 7.1

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-16
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Handling Cost

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-17
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Machining Cost
 Based on Cutting Speed and Feed
 Controlled by Machine Setting
 Shape of Part Is Changed

L L D Eq 7.2
tm  
fN 12Vf

machining cost = Co t m Eq 7.3

© 2004 Pearson Education, Inc.
Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-18
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Machining Cost

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-19
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Tool Associated Costs
 Tool Cutting Edges Wear
 Wear Rate Increases with Speed
 Tools Need to be Replaced/Sharpened
 Takes Operator’s Time
 Apportioned Over Parts Produced

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-20
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Tool Changing Cost

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-21
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Tool Life
 Taylor’s Tool Life Equation
n Eq 7.6
VT  K
 RelatesTool Life to Cutting Speed
 Constants Empirically Determined
-For a Given Set of Conditions Only

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-22
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Determining n and K

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-23
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Apportioning the Tool Costs
 Determine Fraction of the Tool Life
Used Up on Each Part
tm / T
 Tool Changing Cost / Part
tm
perishable tool changing cost = Co tc ( ) Eq 7.7
T

 Tool Cost / Part

tm
perishable tool cost = C pt ( ) Eq 7.8
T
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-24
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Total Machining Time / Part
 tm 
Cu   Co t h  T (C pt  Co tc )  Co t m 
 
Eq 7.9

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-25
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Total Machining Time / Part

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-26
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Finding Optimum Cost / Time
 Minimum Machining Cost
K
Vmin 
n
 1  Co t c  C p
  1 t

 Eq 7.10
 n  Co 


Maximum Production Output

-Ignore Tool Cost - Minimize Time
K
Vmax 
 1  
n
Eq 7.12
  1t c 
 n  
© 2004 Pearson Education, Inc.
Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-27
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Operations Analysis
 Determine
-Production Quantity
-Operations
 DivideOperations into Elements
 Determine Element Times
-For Set Up and Cycle
-From Data Warehouse
-Add Element Times to Get Operation Time
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-28
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Contemporary Operations Analysis
 Steps:
-Factual time and cost estimating catalog
-Product design
-Process knowledge
-Operation sheet preparation
-Time and cost finding

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-29
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Factual time and cost estimating catalog
 Data Warehouse Readiness
- Computer data bases, manuals, and handbooks contain
extensive list of practical time element matched with a
method of description
- Set up and cycle time are found by time study or job
tickets, or from first hand experience
- Set up time is only once
- Cycle time is repeated for each operation up to the lot
quantity N.
- Cycle time elements depend on equipment, operator
training, skill and motivation
- Analyst picks element that are needed realistically for
the job
- If they don’t exist, get opinion from expert or make
comparison
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-30
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Set Up (Table 7.4)
Description Hr

 Once per Lot Punch in and out, 0.2

study drawing
 Given in Hours  

 
Turning
 Select Appropriate
Equipment
Elements First tool 1.3
Each additional 0.3
tool
Collet 0.2
Chuck, fixture 0.1
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-31
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Handling Time (Table 7.5)
 Select AppropriateElements
 Time in Minutes (Watch Units!)
Machine and Element Description Min
Turning, milling, drilling  

Start and stop machine 0.08

Change speed of spindle 0.04
Inspect dimension with micrometer 0.30
Turning equipment  

Cross slide advance, return, and index 0.09

Advance stock through feed tube < 6” 0.18
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-32
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Product Design

1000 units/year
5 lots, 200/lot

Find other rele-

vant information
(BOM, previous
experience,
similar product

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-33
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Process Knowledge
 Knowledge about:
-Equipment and process
-Capabilities of suppliers
-Job description of workers and their skills
-Plant layout
-Schedule of work and future loading
-General and special tooling and its availability
-Tool room availability
-Standard and special shop materials

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-34
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Operations Sheet
 Called a route sheet, instruction sheet
 Divides Manufacturing Process into Operations
 Specifies:
-Machines/Locations
-Sequence
-Work to Be Done in Each Operation

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-35
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Example Operations Sheet
 Initial Operations Sequence
Workstation Op No. Description

Turret lathe 10 Turn and cutoff

Vertical mill 20 End mill slot

Horizontal mill 30 Slab mill flat

NC drill press 40 Drill and tap holes

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-36
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Steps for Operations Sheet
 Interpret Engineering
 Select Work Locations/Equipment
 Specify Tools
 Partition into Distinct Operations
 Describe Each Operation
 Present Information

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-37
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Operations Process Plan
Workstation Op. Description of Setup Cycle Lot
no. operation hr hr/100 hr
     
Turret lathe 10 Face 0.015
         
Turn rough 1.45
         
Turn rough 1.15
         
Finish turn 1.10
         
Turn 1.735
         
Cutoff to 18.75
     
Vertical mill 20 End mill 0.89 slot
     
Horizontal mill 30 Slab mill 4.75 x 3/8
     
N.C. turret drill 40 Drill, tap
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-38
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Machining Time
 Majorityof Cycle Time (Usually)
 Machine Driven (Cutting Feed Rate)
 Function of Design/Material
-Amount of Material to Remove
-Machine Tool(s) Used
-Speeds and Feeds

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-39
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Operation 10
 Set Up (from Table 7.4)
A. Setup elements Hr
Punch in and out, 0.2
study drawing
Collet 0.2
First facing tool 1.3
Additional 5 tools 1.5
Setup total, operation 10 3.2

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-40
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Op 10 - Handling
B. Handling Min
 From
Start and stop machine 0.08
Table 7.5 Advance stock 0.37
Place and remove oil guard 0.19
Speed changes, 0.16
assume 4 x 0.04
End turret 5 x 0.08 0.40
Cross slide advance, return 0.09
Inspect part with micrometer, 0.06
irregular 1/5 x 0.30
Subtotal of handling and 1.35
equipment elements
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-41
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Facing

  Depth         V F tm,
Elem of Cut Ld Ls L D fpm (ipr) min

Face 0.015 0.875 1/32 .906 1.750 350 .007 0.17

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-42
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 First Rough Turn

    Depth         V f tm
Elem Dim of Cut Ld Ls L D fpm (ipr) min

Rough 1.45 0.15 16.5 1/32 16.5 1.75 350 .015 1.44
turn

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-43
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Second Rough Turn

    Depth         V f tm
Elem Dim of Cut Ld Ls L D fpm (ipr) min

Rough 1.15 0.15 16.5 1/32 16.5 1.45 350 .015 1.19
turn

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-44
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Remaining Elements

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-45
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Cycle Times for Remaining Elems
Elem Dim Depth Ld Ls L D V F tm,
of Cut fpm (ipr) min

Finish 1.10 0.025 16.5 1/32 16.53 1.15 350 007 2.03
turn

Elem 1.73 .0075 0.5 1/32 0.53 1.75 350 007 0.10
5
Turn
 
Cutoff 1.75 .875 1/32 0.906 1.75 350 015 0.08

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-46
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Operation 10 Totals
 
Subtotal of machining times 5.01
 
Total cycle time for handling 6.36
and machining

 
D. Entry values for operation sheet,
operation 10
Setup hr 3.2

Hr/100 units 10.600

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-47
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Calculating Length of Cut
 ForRotating Cutters
 Length of Travel at Feed Rate

L  Ls  La  Ld  Lot Eq 7.14

 Safety Length
-For Stock and Mounting Variations

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-48
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Other Length Factors
 Approach/Over Travel
-Gets Cutter Fully Into & Out of Work
-Many Times = Cutter Radius but…
-Over Travel May Not Be Required
 Design Length
-Actual Length Making Cut
-Include All Passes and Lateral Moves

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-49
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
End Mill
Length of Cut

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-50
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Peripheral Cutting Length

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-51
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Approach Length Differs
 Peripheral Milling Need to Consider:
-Cutter Diameter
-Depth of Cut

2 2
 Dc   Dc  Eq 7.15
La       d   d Dc  d 
 2   2 

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-52
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Drilling
 Approach Includes Point Angle

Dc
Lot  = 0.3Dc
2 tan 59

Eq 7.16

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-53
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Operation 20
 Set Up (from Table 7.4)
A. Setup elements Hr

Punch in and out, study drawing 0.2

Slot-cut milling collet 1.6

Setup total, operation 20 1.8

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-54
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Handling
 From Table 7.5
B. Handling and other Min
equipment time elements
Start and stop machine 0.08
Air clean part 0.06
10  lb < 15 lb load into collet 0.25
Open and close air vise 0.06
Change speeds and feeds, 2 x 0.08
Subtotal of handling 0.53
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-55
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 End Milling

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-56
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 End Milling Times
Element Ld Milling V ft (itpr) tm,,
Cutter fpm min

Rough 6.81 0.75 in. 85 0.002 1.97

mill slot end mill,
4 flute

Finish 6.81 0.75 in. 95 0.0015 2.34

mill slot end mill,
4 flute

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-57
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Operation 20 Totals
 
Subtotal of machining times 4.31
 
Total cycle time for handling 4.84
and machining, min

 
D. Entry values for operation sheet,
operation 20

Setup hr 1.8

Hr/100 units 8.067

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-58
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Operation 30
 Set Up (from Table 7.4)
A. Setup elements Hr

Punch in and out, 0.2

study drawing

Special vise 1.1

Setup total, operation 30 1.3

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-59
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Handling
 From Table 7.5
B. Handling and other equipment Min
time elements
Start and stop machine 0.08
Air clean part 0.06
10  lb < 15 lb load into collet fixture 0.25
Open and close air vise 0.06
Subtotal of handling and other 0.45
equipment
© 2004 Pearson Education, Inc.
Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-60
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Peripheral Milling

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-61
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Length of Cut
 Peripheral Milling
-Use Equation 7.15 for Approach and OT
Cutter 4” Dia, Depth of Cut = 3/8”

0.3754  0.375  1.2

 Ld = 1.05, La = Lot = 1.2 (Ls in Rounding of La)
L = 1.05 + 2(1.2) = 3.45
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-62
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Peripheral Milling Times

Element Ld Milling V ftd (itpr) tm

Cutter fpm

Mill flat 3.45 4 in. O.D., 210 0.005 0.43

on end 8 tooth

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-63
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Operation 30 Totals
 
Subtotal of machining times 0.43
 
Total cycle time for handling 0.88
and machining, min

 
D. Entry values for operation sheet,
operation 30

Setup hr 1.3

Hr/100 units 1.467

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-64
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Operation 40
 Set Up (from Table 7.4)
A. Setup elements Hr
Punch in and out, study 0.2
drawing
First turret station 0.75
for drill
Second turret station 0.07
for tap
Collet for holding 0.1
Setup total, operation 40 1.12
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-65
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Handling
 From Table 7.5
B. Handling and other equipment Min
time elements
Start and stop machine 0.08
Air clean part 0.06
10  lb < 15 lb load/unload part into collet 0.22
Open and close air collet clamping 0.05
Index turret, 2 x for drilling and tapping 0.06
Raise tool, move to new locations, 8 x 0.48
Subtotal of handling and other equipment 0.95
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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-66
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Drilling

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-67
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Drilling Time
Tool Ld fdt Lfdt No. tm,,
holes min

Drill, 5/16 0.63 0.61 0.38 4 1.52

Tap, 3/8 – 16 0.5 0.33 0.17 4 0.66

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-68
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Operation 40 Totals
 
Subtotal of machining times 2.18
 
Total cycle time for handling 3.13
and machining, min

 
D. Entry values for operation sheet,
operation 40

Setup hr 1.12

Hr/100 units 5.217

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-69
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Post All of the Times
Op. Setup Cycle Lot
no. hr hr/100 Hr
units (Qty = 200)

10 3.2 10.600 24.4

20 1.8 8.067 17.9

30 1.3 1.467 2.9

40 1.12 5.217 10.4

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-70
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Tool Cost
 Tools Facilitate Manufacturing
 Tool Cost Is Part of Operation Cost
 Tools – Permanent, One-Time Cost
-Nonrecurring, Initial Fixed Cost
 Tools Require Engineering Design
 Tools Can Be a Large Cost

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-71
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Tool Cost Estimating
 Simple Methods
-Standard Time Data
-Use Tables
-Broad, General Categories
 One Time Cost
-Estimate Less Critical
-Usually Hours Is the Increment

© 2004 Pearson Education, Inc.

Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-72
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Drill Jig Example

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-73
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Drill Jig Cost
Description of tool elements Hr
Angular base plate, C-angle 7.0
Guide bushing 2.0
Hinge plate 12.0
Clamp with screw 7.5
Feet, 3 7.5
Pin locators, 5 8.8
Total 44.8
Productive hour cost for tool making $75
Cost of tool, 44.8 x 75 $3360
Material cost, $25/lb 200
Total cost of tool $3560
© 2004 Pearson Education, Inc.
Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-74
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 What to Do with Tool Costs
 Addto Overhead (NOT Recommended)
 Amortize Over Production

C nif
Cot  Eq 7.18
N
N Is Critical
-Too Small N, Tooling Cost Too High
-Too Large N, Tooling May Not Be Paid For
© 2004 Pearson Education, Inc.
Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-75
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Tooling vs. No Tooling
 Compare Manufacturing Cost
-Using Tooling (Saves Labor)
-Without Tooling (Additional Labor)

Na (1  p )  SU
C nif  Eq 7.19
I T  D  M

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-76
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Calculate the Operation Cost
 Batch Manufacturing Situation
-Allow queues and storage between operation
-Layout is job shop style
 Determine Hours for the Lot

lot hours = SU b  N  H b Eq 7.20

 Find the Batch (Lot) Cost

Cbo  lot hours  PHCi Eq 7.21

© 2004 Pearson Education, Inc.
Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-77
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
Total Product Manufacturing Cost
 Cost for All Operations
n
Ctbo   lot hours  PHC
i
i i

 Include Material and Tooling Costs

C bu  C bo / N  C dm  C ot /N Eq 7.22

© 2004 Pearson Education, Inc.

Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-78
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Cost for Pinion Example
Op. Lot PHC Lot Unit
no. hr cost cost
10 24.4 39.16 $955 $4.78
20 17.9 90.98 $1631 $8.16
30 2.9 90.98 $267 $1.34
40 10.4 39.16 $409 $2.04
       
Total Lot Cost $3262
       
Unit Production Cost $16.32
       
Total Unit Cost (incl. $21.43 Matl) $37.66
© 2004 Pearson Education, Inc.
Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-79
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Flow Line Manufacturing
 Mass Production, Assembly Lines, adopted by
Henry Ford in 1900s
 All Operations Interdependent
 Times Determined from Station Requiring the
Longest Time
 Imbalance Leads to Idle Time for Other Stations

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-80
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Flow Line Set Up Time
 Find Maximum Station Set Up Time
SU f  maxSU i 

 Total Cost for Line Set Up

n
Set Up Cost =  PHC  SU
i
i f , i  1, 2,  , n

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458
Eq 7.23 Ch 7-81
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Flow Line Cycle Time
 Find Maximum Station Cycle Time
H f  max{H i }
 Total Cost for Line Cycle Time
n
Cycle Cost = N  PHC  H
i
i f , i  1, 2,  , n Eq 7.24

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Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-82
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Total Product Time (Flow Line)
 Determine Lot Hours

lot hours = nSU f  nNH f Eq 7.25

 If nSUf is Very Small Compared to nNHf

-Set Up Cost Can Be Ignored
-Covered in Overhead

© 2004 Pearson Education, Inc.

Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-83
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Total Product Cost (Flow Line)
 Total Labor Cost
n n
Cf =  PHC  SU
i
i f N  PHC  H
i
i f Eq 7.26

 Total Product Cost

C fu  C f / N  Cdm  C ot /N Eq 7.27

© 2004 Pearson Education, Inc.

Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-84
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management
 Summary
 Determined Costs for Manuf. Operations
 Found Direct Labor Times
-Set Up and Cycle Times
-Machining Time
 Studied a Metal Machining Example
 Added Tooling Costs
 Briefly Looked at Flow Line Costs

© 2004 Pearson Education, Inc.

Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ch 7-85
Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management