Cost Analysis of Electronic Systems

This book provides an introduction to the cost modeling for electronic systems that is suitable for advanced undergraduate and graduate students in electrical, mechanical and industrial engineering, and professionals involved with electronics technology development and management. This book melds elements of traditional engineering economics with manufacturing process and life-cycle cost management concepts to form a practical foundation for predicting the cost of electronic products and systems. Various manufacturing cost analysis methods are addressed including: process-flow, parametric, cost of ownership, and activity based costing. The effects of learning curves, data uncertainty, test and rework processes, and defects are considered. Aspects of system sustainment and life-cycle cost modeling including reliability (warranty, burn-in), maintenance (sparing and availability), and obsolescence are treated. Finally, total cost of ownership of systems, return on investment, cost-benefit analysis, and real options analysis are addressed.

Contents:

• Introduction

• Manufacturing Cost Modeling:

  • Process-Flow Analysis
  • Yield
  • Equipment/Facilities Cost of Ownership (COO)
  • Activity-Based Costing (ABC)
  • Parametric Cost Modeling
  • Test Economics
  • Diagnosis and Rework
  • Uncertainty Modeling — Monte Carlo Analysis
  • Learning Curves

• Life-Cycle Cost Modeling:

  • Reliability
  • Sparing
  • Warranty Cost Analysis
  • Burn-In Cost Modeling
  • Availability
  • The Cost Ramifications of Obsolescence
  • Return on Investment (ROI)
  • The Cost of Service
  • Software Development and Support Costs
  • Total Cost of Ownership Examples
  • Cost Benefit and Risk Tradeoffs
  • Real Options Analysis

• Appendices:

  • Notation
  • Weighted Average Cost of Capital (WACC)
  • Discrete-Event Simulation (DES)

Readership: Graduate students and professionals in electrical and electronic engineering, mechanical engineering and industrial engineering.
Key Features:

• Engineering economics treats the analysis of the economic effects of engineering decisions and is often identified with capital allocation problems. Engineering economics provides a rigorous methodology for comparing investment or disinvestment alternatives that includes: time value of money, equivalence, present and future value, rate of return, depreciation, break-even analysis, cash flow, inflation, taxes, etc. While it would be wrong to state that this book is not an engineering economics book (it is), this book focuses on the detailed cost modeling necessary to support engineering economic analyses with the inputs it requires for making investment decisions. However, while traditional engineering economics is focused on the financial aspects of cost and performing discounted cash flow analysis, cost modeling concerns itself with modeling the processes and activities associated with the manufacturing and support of products and systems
• The majority of engineering education (and specifically electronic systems focused education) is almost exclusively focused on designing and manufacturing systems, ignoring the support and sustainment of systems. Part II of this book focuses specifically on post-manufacturing life-cycle costs associated with sustaining systems over long periods of time
• This book is electronics focused. While many aspects of the book could be applied to just about any type of system, the specific example used and topics covered are particularly relevant to electronics