Manufacturing Costs for Clothes Washer U.S. Department of Energy ivianui Workshop a si e Office of Energy Efficiency Clothes Washers P . and Renewable Energy

July 23, 1997 1000 Independence Avenue, SW

,uu ~Washington, ~Y^. , DC 20585

Approaches to Data Gathering,

Reporting and Statistical

Treatment "43

(5
Clothes Washer Workshop: Manufacturing Costs

Introduction

4/ Where costs are used

- Life-cycle cost analysis

- Manufacturer impact analysis

Need for new cost information

- Update/validate current information

- Recent experience with new technologies

-Consideration of Whirlpool technologies

- Compliance with the Process Rule

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Clothes Washer nWirksho:,, Manufacturing Costs

Data Collection Issues

IV Data collection timetable

.I Characterizing uncertainty in manufacturing costs

V^ Variability between manufacturers for GRIM analysis

V Costing approach/Engineering analysis

Vt Consideration of Whirlpool prototype

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Clothes Washer Workshop: Manufacturing Costs

Data Collection Timetable

Importance of a finalized revision to the test procedure

Establishment of a baseline MEF value

Milestones (approximate)

- Finalized revision to test procedure (Begin)

- Establishment of baseline MEF (Week 4)

-Data submittals to AHAM (Week 12)

- Release of data to DOE (Week 16)

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Clothes Washer Workshop: Manufacturing Costs

Characterizing Uncertainty in Manufacturing Costs

Kv The Department is proposing a method to capture uncertainty in cost

estimates:

-Manufacturers would provide a range of costs associated with

achieving an efficiency level. Ranges provided separately for

variable and fixed costs.

-Ranges described by triangular distributions with minimum, most

likely and maximum values. Custom distributions will be accepted.

-Shipment-based weights assigned to each distribution.

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Clothes Washer Workshop: Manufacturing Costs

Illustrative Input Distributions for Incremental Manufacturing Costs

Efficiency ' ,

Level 1 1 - --

0 1 2 3 4 5 6 7 Manuf- Mkt. Mkt.

Incre.m enta C ost ($) acturer Share egen

A 50%

Efficiency -

B 30% -

Level 2 _ ., --- 20%-

-C 20%'

0 1 2 3 4 5 6 7 8

Incremental Cost ($)

Efficiency /

Level 3

0 I1 2 3 4 5 6 7 8

Incremental Cost ($)

Manufacturers can specify the minimum, most likely, and maximum

costs of achieving a particular efficiency level.

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Clothes Washer Workshop: Manufacturing Costs

Characterizing Uncertainty in Manufacturing Costs

v/ Samples drawn from manufacturer distributions to create an industry

distribution.

1 Results reported as distribution curves over entire range of costs and

for all efficiency levels.

4/ Range of costs reported for different percentile intervals (e.g., mean,

10%, 25%,50%,75%, 90%).

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Clothes Washer Workshop: Manufacturing Costs

Shipment Weighted Cost Distributions

Forecast: W Avg Var Cost Lvl 1

1,000 Trials Frequency Chart 2 Outliers

.032 32

.024 24

Efficiency = ' _I . - co 016 16 Level 1

.0 ,08 s

.000 0

$1.75 $2.25 $2.75 $3.25 $3.75

Forecast:W Avg Var Cost Lvl 2 Sampling of cost

1,000 Trials 

.027 

Frequency Chart 2 Outliers distributions with 27 with

o.020 t ,20.25 l application of market

Efficiency .0I Ll ,I Lvficelncy - 0 l l l l111,2 i,, 1. l share weights results in

Level *° 20, 0 Liilllllll lLtI -- .-- 6.7 industry cost

.00o0 jiiBlr i m f0 distributions for each $2.75 $3.31 $3.88 $4.44 $5.00

efficiency level

Forecast: W Avg Var Cost Lvl 3

1,000 Trials Frequency Chart 0 Outliers

Efficiency 5 .012 I ll | 12

Level 3

000 llllllll l. 0ll $4.00 $4.75 $5.50 $6.25 $7.00

Cost AT , ,97 DRAFTJuly 9, 997 8 lt.
Clothes Washer Workshop: Manufacturing Costs

Cost - Efficiency curves can be constructed for various percentile values indicating % of shipments below a certain cost.

$7.00

$6.00-- 90%

75%

50%

$5.00- - 0 t 0 25%

10%

8 $4.00-

$3.00

$2.00

$1.00-------_

1 2 3

Efficiency Level

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Clothes Washer Workshop: Manufacturing Costs

Variability between Manufacturers for GRIM Analysis

,/ Shipment weighted cost distributions for the industry can be directly

input to GRIM.

The Department is seeking additional input on the mechanics of

performing sub-group or manufacturer specific GRIM analysis.

4/ Comments are welcome on a methodology suggested by one of the

stakeholders.

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Clothes Washer Workshop: Manufacturing Costs

Costing Approach/Engineering Analysis

/' Manufacturers have indicated their preference for an ENERGYEFFICIENCY approach to reporting manufacturing costs.

4/ AHAM members believe appropriate levels are baseline, 5%, 10%,

15%, and 20% improvement applied to an existing Vertical Axis

clothes washer and improvements of 35%, 40%, 45% and 50%

applied to a Horizontal Axis clothes washer.

/ The value of the baseline MEF will be calculated once the test

procedure is finalized and efficiency improvements reviewed

accordingly.

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Clothes Washer Workshop: Manufacturing Costs

Costing Approach/Engineering Analysis (cont.)

Manufacturers do not believe that disclosure of design options is

practical and possible given the proprietary nature of the

information.

V. AHAM has requested a modification to the survey instrument in

order to segment the costs of Tooling, Investment, Research and

Development, and Marketing.

More specific definitions of these and other cost categories has

been prepared by DOE.

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Clothes Washer Workshop: Manufacturing Costs

Consideration of Whirlpool Prototypes

AHAM members believe it is not appropriate for them to comment

on the cost/efficiencies of Whirlpool designs.

Whirlpool does not think it is appropriate for them to provide costing

information on these prototypes. They have offered to cooperate

instead with a third-party cost assessment.

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Clothes Washer Workshop: Manufacturing Costs

Consideration of Whirlpool Prototype (cont.)

The Department intends to have the Whirlpool designs costed for

use in future analysis.

V, Details of this assessment will be vetted with stakeholders prior to

its initiation.

~/ The cost data will not be formally integrated to the Life-Cycle-CostAnalysis until more information is available on these designs.

4/ The cost data will be included in the Manufacturer Impact Analysis.

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