7.2: An Engineering Cost Analysis Example
Suppose you are a design engineer for a company that manufactures consumer electronic devices and you are estimating the cost of producing a new product. The product has four components that are purchased from electronic parts suppliers and assembled in your factory. You have received cost information from your suppliers for each of the parts; as is typical in the electronics industry, the cost of a part depends on the number of parts you order from the supplier.
Your assembly cost for each unit include the cost of labor and your assembly plant. You have estimated that these costs are
C0=$45.00/unit.
The cost of each part depends on the number of parts purchased; we will use the variable
CA
,
CB
,
CC
,
and
CD
to represent the unit cost of each type of part. These cost are given in Tables 36.
n 
CA 


$ 

$ 

$ 

$ 
n 
CB 


$ 



$ 

$ 
n 
CC 


$ 

$ 

$ 
n 
CD 


$ 

$ 

$ 
The unit cost is
Cunit = C0 + CA + CB + CC + CD
.
To find the unit cost to build one unit, we look in the above tables with a value of
n
= 1; the unit cost is
$
To find the unit cost to build
n
= 20 and get
$
As expected, the unit cost for
Exercise 13
Create an if statement that will assign the proper cost to the variable
CA
based on the value of the variable
n
.
Exercise 14
Create a script that will compute the total unit cost
Cunit
for a given value of the variable
n
.
Exercise 15
Create a mfile script that will compute and plot the total unit cost as a function of
n
for values of
n
from
Exercise 16
Suppose that you decide to fire your workers, close down your plant, and have the assembly done offshore; in this arrangement,
C0 = Cx + Cs
,
where
Cx
is the cost of offshore assembly and
Cs
is the cost of shipping assembled units from the assembler to your warehouse. After some investigation, you find an offshore assembler that gives you the assembly costs as a function of the number of units to assemble shown in Table 7.
n 
Cx 


$ 

$ 

$\begin{align*}22.00\end{align*} 
You also find a shipping company that will ship the units from the assembler to your warehouse and whose freight charges are a function of the number of units shipped as shown in Table 8.
n 
Cs 

\begin{align*}19\end{align*}  $\begin{align*}20.00\end{align*} 
\begin{align*}1024\end{align*}  $\begin{align*}18.00\end{align*} 
\begin{align*}2574\end{align*}  $\begin{align*}16.00\end{align*} 
\begin{align*}75 \;\mathrm{or\ more}\end{align*}  $\begin{align*}15.00\end{align*} 
Update the mfile script in Exercise 15 to account for the changes in cost due to offshoring.