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ADMS 4245 (12)
Lecture

CHAPTER 11.doc

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Department
Administrative Studies
Course
ADMS 4245
Professor
Peter Modir
Semester
Winter

Description
CH 11 – Design for Manufacturing Definition of Design for Manufacturing • Manufacturing cost is a key determinant of the economic success of a product • DFM Requires a Cross-Functional Team: DFM utilizes information of several types: o 1) Sketches, drawings, product specifications, and design alternatives o 2) a detailed understanding of production and assembly processes o 3) estimates of manufacturing costs, production volumes, and ramp-up timing o Therefore, it requires the contributions of most members of the development team as well as outside experts. • DFM is performed throughout the development process o When choosing a product concept, cost is almost always one of the criteria on which the decision is made – accurate cost estimates finally become available during the detail design phase of development, when many more decisions are driven by manufacturing concerns. Overview of the DFM Process: it consists of five steps plus iteration: this helps the team to determine at a general level which aspects of the design – components, assembly, or support are most costly. The team then directs its attention to the appropriate areas in the subsequent steps. 1. Step 1: Estimate the Manufacturing Costs a. Manufacturing cost is the sum of all of the expenditures for the inputs of the system and for disposal of the wastes produced by the system. i. Component Costs: the components of a product (or parts) may include standard parts purchased from suppliers. Example of standard parts are motors, screws, switches, etc. other components are custom parts, made according to the manufacturer’s design from raw materials, such as sheet steel, plastic, aluminum. ii. Assembly Costs: the process of assembling almost always incur labour costs and many also incur costs for equipment and tooling. iii. Overhead Costs: Overhead is the category used to ecompass all of the other costs. 1. Support Costs: associated with materials handling, quality assurance, purchasing, shipping, receiving, facilities, and equipment/tools maintenance. 2. Indirect allocations: cost of manufacturing that cannot be directly linked to a particular product but which must be paid for to be in business. Eg, the salary of the security guard. 3. Indirect costs: because indirect costs are not specifically linked to the design of the product, they are not relevant to DFM, even though they do contribute to the cost of the product b. Fixed Cost VS. Variable Costs i. Fixed cost: Those that are incurred in a predetermined amount, regardless of how many units of the product are manufactured. ii. Variable costs: those incurred in direct proportion to the number of units produced such as labour and raw material. c. The Bill of Materials: The BOM is a list of each individual component in the product. The columns of the BOM show the cost estimates broken down into fixed and variable costs. The variable costs may include materials, machine time, and labour. Fixed cost may include specialized equipment. d. Estimating the Costs of Standard Components i. Comparing each part to a substantially similar part the firm is already producing or purchasing in comparable volumes or ii. Soliciting price quotes from vendors or suppliers. e. Estimating the costs of custom components i. Almost the same as standard components f. Estimating the cost of Assembly i. Product made of more than one part require assembly. ii. Manual assembly costs can be estimated by summing the estimated time of each assembly operation and multiplying by a labour rate. iii. A popular method for estimating assembly times has been developed over the operations and is now available as a software tool. g. Estimating the Overhead costs i. Accurately estimating overhead costs for a new product is difficult, and the indus
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