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Top1. Introduction
The manufacturing companies are facing on going challenges of high quality, low cost and in-time delivery of products in present scenario of competitive global market, dynamic and rapid changes of customer needs. Further, recycling and disposal after use is also gradually becoming responsibility of manufacturer due to global and domestic environment regulations. These challenges driving the manufacturing industry to change its traditional product development process to modern process using concepts like concurrent engineering, product lifecycle management in their product development. Many companies started to consider the cost issues related to service and maintenance, environment impacts of their processes and products, recycling and disposal after use (MacDue, 1996). This trend leads most of the companies to show a keen interest in the lifecycle cost approach in product design rather than in a pure manufacturing related cost approach.
The lifecycle cost approach involves use of the product’s cost information to track and analyze the financial behaviours of activities associated with each phase of a product’s lifecycle. In this regard, properly choosing and applying a costing method to calculate product cost accurately plays an important role. The product manufacturing costs represent only a low proportion of the total cost. Non-manufacturing product costs such as plant overheads, distribution overheads have expanded greatly in the total cost. The product lifecycle cost is calculated with traditional costing methods, which focus on the costs of materials and labor rate but not estimating the real cost of a product (Duverlie, 1999).
In a series papers, Boothroyd, and Dewhurst (1983 & 1984) presented models for calculating the cost of assembly of products using robots, automatic machines, and manual labor. These models formalized into computer programs. Dewhurst and Boothroyd developed a cost model which estimates the machine cost, mould base cost and cavity cost for establishing the manufacturing cost of injection moulded parts (Dewhurst, 1988). Keys, Balmer, and Creswell (1987) focused on cost modeling for printed wiring board assembly. They developed a simulation process to ensure the reliability of the manufacturing data to improve the cost model. Noble, and Tanchoco (1990) presented a conceptual framework for concurrent design and economic justification of systems that allows the decision maker to see the economic implications for different design alternatives based manufacturing cost of the product. Although the framework is useful, the model is based on traditional accounting concepts which are not very useful for accurate cost estimate. McIlhenny, Sethumadhave, Lee, and Keys (1993) developed a cost estimation model for parts by injection mould. It includes mould base and process cost, material cost and maintenance cost. Bruckner and Ehrlenspiel (1993) presented research data to build a tool for assisting the designers to achieve a cost-effective design of gear drive. Ong (1995) developed an activity based cost estimating system to help designers for estimating the manufacturing cost of a printed circuit board assembly at the early concept stage of design. Though the author claims the model is meant to be used at the conceptual phase of design, the data required for the evaluation will most probably not be available until the preliminary design stage.