11/-0 

CHAPTER 4: ENGINEERING ANALYSIS 

4.1 INTRODUCTION 

The Engineering Analysis determines the maximum technologically feasible energy efficiency 

level and develops cost-efficiency relationships to show the manufacturer costs of achieving increased 

efficiency. As described later in this section, manufacturers were asked to provide clothes washer 

performance and manufacturing cost information for conducting the engineering analysis. Data was 

collected utilizing the efficiency-level approach. The clothes washer manufacturers remarked that this 

approach was the most suitable approach for showing the manufacturing cost of achieving increased 

efficiency and also provided a high degree of confidentiality of design. This approach consists of 

letting the manufacturers supply cost and corresponding efficiency data using any design options or 

design option combinations they choose. The collected information describes manufacturer specific 

costs of achieving predetermined efficiency levels. This format has the benefit of being entirely 

compatible with data requirements for manufacturer impact analysis. 

4.2 PRODUCT CLASSES 

For this rulemaking the Department is proposing the following classes: Compact (less than 

2.0 ft. 3 capacity) and Standard (2.0 ft. 3 or greater capacity). Based on current information, the 

Department believes that there is no basis for separate product classes for H- and V -axis clothes 

washers. Recent and near-term product offerings, and working prototypes ofH- and V-axis clothes 

washers demonstrate large energy savings while maintaining important product features. The 

Department is proposing to eliminate certain previously defined classifications (Semi-Automatic 

Top-Loading, Front-Loading and Suds Saving) because they do not offer any added utility which is 

inherently less energy efficient and therefore would require protection from the energy conservation 

standards. In the May 1991 Final Rule, these classes were not subject to minimum energy 

conservation standards because they represented a small portion of the market, and there was 

insufficient information to analyze them. However, the 1988 standard requiring an unheated rinse 

option is still applicable to these classes. The Department has further reviewed this topic and believes 

that these products should be subject to the minimum energy conservation standards applicable to 

either compact or standard clothes washers. 

4.3 BASELINE UNIT 

A baseline unit is the starting point for analyzing design options for improving energy 

efficiency. In this engineering analysis, the baseline unit represents a typical model with an energy 

efficiency no lower than the minimum required by the amended National Appliance Energy 

Conservation Act (NAECA). New minimum standard for clothes washers (top loading, 1.6 cu.ft. 

4-1 
or greater capacity) was set at Energy Factor (EF) = 1.18 cu.ft./kWh per cycle and became effective 

on May 14, 1994. 

The Department issued two new test procedures during the course of this rulemaking: 

Appendices "J" and "JI" 62 FR45484 [1]. (See Sectionl.B.2. on Test Procedure). The Engineering 

Analysis presented in this document is based on the Appendix JI test procedure. This test procedure 

calculates a MEF (Modified Energy Factor) descriptor. Unlike its EF predecessor, the MEF uses 

remaining moisture content (RMC) to account for energy saved due to lower drying times and 

temperature use factors (TUFs). Using cloth loads and different water temperatures are among the 

many other substantive differences between the J and JI test procedures. Given these different testing 

methods and variables, there is no computational relationship between the EF and MEF descriptors. 

In order to determine the MEF value for the baseline unit, clothes washer manufacturers were 

asked to take a representative clothes washer with an EF as close as possible to 1.18 (current 

minimum EF) and perform the new JI procedure. If no clothes washer was available with an EF 

value close to 1.18, they were asked to adjust the water volume, machine energy, and/or hot water 

volume to obtain an EF of 1.18. Five manufacturers (Amana, Frigidaire, GEA, Maytag and 

Whirlpool) submitted data to the Association of Home Appliance Manufacturers (AHAM). AHAM 

mathematically averaged these values to derive an industry average MEF value of 0.817 for the 

baseline unit (based on an EF= 1.18) [2]. 

4.4 COST-EFFICIENCY DATA COLLECTION 

Manufacturing cost and efficiency data was collected utilizing the efficiency level approach, 

in cooperation with AHAM. The manufacturers provided cost and corresponding efficiency data 

using any design options or design option combinations they choose. The collected information 

describes manufacturer specific costs of achieving predetermined efficiency levels in addition to the 

energy-use characteristics. AHAM members provided costs and energy data for the following levels: 

Baseline, 5%, 10%, 15%, 20% and 25% improvement applied in an existing Y-axis clothes washer 

and improvements of 35%, 40%, 45%, and 50% applied in a H-axis clothes washer. Manufacturers 

believe that the disclosure of their individual costs is not practical given the proprietary nature of the 

information. Hence they agreed to provide detailed cost information to AHAM which would then 

aggregate this data and provide "industry" costs to DOE. 

4.4.1 Characterizing Uncertainty 

In the manufacturing cost information previously supplied by manufacturers (Comment#38, 

AHAM), a confidence level was provided to characterize the probability of achieving the costs 

reported. Building on this framework, DOE proposed modification to the most recent data collection 

so that the cost estimates reported would be bound by a range. DOE requested manufacturers to 

provide a range of costs associated with achieving each efficiency level. Separate ranges were 

requested for variable and fixed costs. 

4-2 
For example, for characterizing variable costs, each manufacturer was asked to provide its 

best point estimates ("most likely" values) for incremental material, labor and overhead costs for 

achieving a particular efficiency level. These disaggregated costs were then added to arrive at the 

"most likely" total variable cost for that manufacturer. In addition manufacturers were asked to 

indicate their maximum and minimum total variable costs to meet the efficiency level. Triangular 

distributions created using minimum, maximum, and "most likely" values were used to characterize 

the uncertainty associated with the manufacturing cost estimates. Similar procedure was adopted for 

fixed costs. Figure 4.1 shows illustrative input distributions for incremental manufacturing costs. 

This figure assumes that data is provided by three manufacturers. 

Efficiency 

Level1 

Efficiency 

Level2 

0 

0 

2 

2 

3 4 5 

Incremental Cost($) 

3 4 5 

Incremental Cost($) 

Manuf- Mkt. 

6 7 8 acturer Share 

A 50% 

B 30% 

c 20% 

6 7 8 

Figure 4.1 Illustrative input distributions for incremental manufacturing costs 

4.4.2 Variability in Costs between Manufacturers 

Legend 

-

-·-· 

--

The clothes washer manufacturing costs previously submitted to DOE (Comment#38, 

AHAM) demonstrated large variability in some cases. This variability was expressed using the 

standard deviation in previous data submittals. DOE will not be using standard deviation figures to 

conduct its subgroup analysis since these may mask serious cost impacts, particularly to smaller firms. 

The Department requested disaggregated cost data from all manufacturers. Cost distributions, both 

variable and fixed, for the industry for achieving a particular efficiency level were obtained by 

applying shipment-based weights to each manufacturer's cost distribution. This approach captures 

the richness of the data provided by manufacturers and ensures that the final cost distributions 

incorporate each individual manufacturer's cost distributions thereby accounting for variability in the 

data submittals. 

4-3 
4.4.3 Manufacturer Assumptions for Supplying Data 

AHAM in conjunction with Arthur D. Little proposed the following items to be used as 

guidelines to the manufacturers for data collection: 

0 Each incremental MEF above the baseline will be viewed as the prospective future standard 

level. Thus the data entries for energy and costs should be those that are necessary to convert 

100% of the company's production to that minimum standard level. Each incremental step 

will be viewed as a separate entity. Thus, for example, if a company has some washing 

machines which already meet a new level above the baseline, then the costs shown would be 

to convert the remainder of all machines. In addition, no assumption will be made about 

multiple standards levels or phase-in periods. For example, if a company were developing the 

costs for the 20% Y-axis level ofMEF=l.021, then it should be assumed that DOE would 

announce (accordingly to previously announced schedule) on October 1999, that the new 

standard level would be MEF=l.021 at some date at least three years hence. 

• All MEF levels are to be obtained by using the Appendix J1 test procedure. Whereas, the 

baseline calculations assumed a warm-rinse to be included, this is not the case with the 

projected levels. Manufacturers may use whatever means to achieve the individual levels. 

• The MEF levels given represent incremental percentage efficiency improvement levels over 

the baseline. Companies have been asked to include cost and efficiency data for data points 

that may occur between the levels on the next lowest increment level. For example, if a 

company were to have technology that would allow them to obtain a 22% increase in 

efficiency (or an MEF of 1.05), that data would be entered on the line for a 20% 

improvement. 

° Cost and efficiency data may have some incremental "step"-type function. Thus, companies 

may know of technology that would enable then to reach a 20% improvement in efficiency, 

but may not have the technology available to reach a 15% efficiency level. In this case, the 

costs and efficiency improvements for the 20% level would be entered into the line for both 

the 15% and 20% improvements. 

° Companies may use information on product costs, capital and tooling, or factory 

improvements which have already been incurred. If a company has made product 

improvements to energy efficiency as a result of the May 14, 1991, Final Rule and anticipated 

future energy standards in excess of those implemented on May 14, 1994, then these costs 

may be used to develop the efficiency and costs for this data collection exercise. In this case, 

companies have been asked to use information on costs incurred that directly relate to energy 

efficiency improvements in excess of the 1994 standard. Companies may use this information 

as a basis with which to calculate conversion of 100% of their production to that minimum 

standard level, according to the levels shown in the accompanying chart. 

DOE worked with AHAM in developing a survey instrument which was then sent out by 

AHAM to manufacturers requesting detailed cost and energy-use data for each efficiency level. The 

energy and water-use data for the industry was obtained by applying shipment-weights to each 

manufacturer's data. This data is presented in Table 4.1. 

4-4 
" 

Table 4.1 Energy-use Data 

Product Characterisics FnernvUse Water Use 

Percent MEF Total EnerW- Clothes Hot Machine __ Diyer ___ Water Water 

Irr1provement w/ dryer Container Water Fners.>.: Fnerl!V Use Use 

cu. ft.!kWhlcycle kWh/cycle cu.ft. kWh/cycle kWh/cycle kWh/cycle gal.I eye gal./ cu.ft. 

[I] [2] [3] [4] [5] [6] [7] [8] [9] 

Baseline 0.817 3227 2.847 1.587 0.209 1.43 39.181 13.779 

5 0.860 3.165 2.817 1.543 0.209 1.413 38.613 13.732 

IO 0.908 3.017 2.822 1.408 0.209 1.4 38.613 13.71 

15 0.961 2.833 2.832 1216 0209 1.407 38.621 13.67 

20 1.021 2.739 2.893 1.113 0218 1.408 38.446 13.342 

25 1.089 2.292 2.866 0.715 0.304 1273 26.6 9.22 

35 1257 1.866 2.749 0.462 0.133 1.27 21.03 7.661 

40 1.362 1.859 2.749 0.462 0.133 1263 21.03 7.661 

45 1.485 1.651 2.736 0.429 0.114 1.107 23.405 8.57 

50 1.634 1.574 2.736 0.413 0.114 1.047 23.405 8.57 

For data in columns [3), [4], [5], [6],[7],[8], and [9], companies were asked to approximate 

the energy component that they would use to develop the MEF shown in column [2]. Where this 

<la.ta includes multiple products with varying clothes container capacities, for instance, a shipment 

w1~ighted average within the product mix could be used. 

4.:5 DATA AGGREGATION 

Arthur D. Little prepared a spreadsheet to aggregate cost data obtained from various 

mmufacturers. AHAM used this spreadsheet to aggregate the cost data obtained from the 

mmufacturers. This aggregated data was then presented to DOE. This procedure helped address 

concerns of manufacturers concerning the proprietary nature of the manufacturing costs and their 

disclosure. 

The aggregation spreadsheet takes each manufacturer's total variable (labor, material and 

overhead) and total fixed (tooling, investment, R&D, and marketing) costs characterized using 

triangular distributions and aggregates them applying shipment-based weights to arrive at the total 

va~iable and fixed cost distributions respectively for the industry for achieving each efficiency level. 

The aggregation spreadsheet was developed using Microsoft Excel and Crystal BallTM [3] software 

and has the ability of treating custom distributions also. 

The following procedure is used for arriving at the industry incremental total variable cost 

distribution for a particular efficiency level from individual manufacturers' cost submittals: 

4-5 
• Each manufacturer's incremental material, labor and tooling costs are added to arrive at the 

manufacturer's "most likely" incremental total variable cost. 

• The "most likely" incremental total variable cost along with the minimum and maximum 

values of incremental total variable costs, as reported by manufacturers, are used to create 

triangular distribution for the incremental total variable cost. 

• Samples are drawn from each manufacturer's incremental total variable cost distributions to 

create an industry incremental total variable cost distribution. The number of times a 

particular manufacturer's cost distribution is sampled relative to others is dependent on its 

relative market share (when compared to other manufacturers). 

Figure 4.2 graphically illustrates individual manufacturers' incremental total variable cost 

distributions and the industry total incremental variable cost distribution thus obtained (here it is 

assumed that the industry is made up of two manufacturers with each having a 50% market share). 

The final cost distribution can also be presented using percentile values- 0, 10, 25, 50, 75, 

90 and 100 percentiles. Crystal BallTM software was used for specifying individual distributions and 

for sampling them to arrive at the final distribution. CryStal BallTM provides the flexibility ofreporting 

the final distribution graphically or by specifying percentile values. AHAM provided aggregated 

industry cost data using percentile values. 

This procedure was used for arriving at the industry incremental total variable cost distribution 

for each efficiency level. Industry incremental total fixed cost distributions are also obtained using 

the same steps as for the variable cost. In addition, shipment weighted averages of the most likely 

costs, both fixed and variable, were also calculated for each efficiency level as point values for 

incremental costs. 

4-6 
Efficiency 

LevelX 

0 

1.00 

Manufacturer A . 

Manufacturer B 

~ 4 s & I t 

1 Incremental Cost($) 1 1 

-1 _1 _1 ~I ~I ~I 01 in1 01 

!!?.1 !::.1 e1 

I 

2.75 4.50 6.24 

Incremental Cost($) 

8.00 

Total Rel. 

Probability 

= 1.0 

lFigure 4.2 Industry cost distribution obtained by sampling each manufacturer's cost 

distributions 

The results after aggregation are presented in Tables 4.2 through 4.4. Table 4.2 gives the 

industry cost data using "most likely" values. Tables 4.3 and 4.4 present detailed cost distributions 

for total variable, total fixed, and incremental total manufacturing costs using percentile values. 

Table 4.2 Aggregated Cost Data using "Most Likely" Values 

Product Characterisics Variable Costs Total Total lncremen. No. of 

Percent MEF Cost Per Unit Variable Fixed Mfg. Cost Respondents 

Improvement Materials Labor Overhead Costs Costs 

cu. ji./kWhlcyc/e ($per Unit) ($per Unit) ($per Unit) ($per Unit) 

[I] [2] (12] (13] (14] (15] (22] (23] 

Baseline 0.817 

5 0.860 $0.01 $0.01 $0.00 $0.02 $0.07 $0.09 5 

IO 0.908 $0.25 $0.04 $0.01 $0.30 $0.61 $0.91 5 

15 0.961 $3.18 $0.10 $0.04 $3.32 $1.01 $4.33 5 

20 1.021 $10.71 ($0.02) ($1.80) $8.89 $6.21 $15.10 5 

25 1.089 $36.14 $8.61 $0.09 $44.84 $19.29 $64.13 5 

35 1.257 $86.73 $10.94 $7.78 $105.45 $22.72 $128.17 5 

40 1.362 $87.15 $10.94 $7.78 $105.87 $22.72 $128.59 5 

45 1.485 $125.58 $15.52 $14.51 $155.61 $24.67 $180.28 4 

50 1.634 $132.40 $15.68 $14.51 $162.59 $24.67 $187.26 4 

4-7 
--------------

For column [12], companies were asked to indicate incremental costs associated with 

materials that would be needed to achieve the particular standards levels in $ per washer unit. 

For column [13], companies were asked to indicate the incremental cost oflabor associated 

with the new technology to reach the particular standard levels in$ per washer unit. 

For column [14], companies were asked to indicate the incremental overhead cost associated 

with this standard level. On column [14], for example, additional electricity to produce new 

components may be considered as overhead. 

For each of these columns, entries on the baseline line are not necessary. However, 

companies that may have variable cost increases necessary to bring all production up to the minimum 

ofMEF=0.817 were asked to include this cost in the 5% improvement line. 

4-8 
Table 4.3 Industry Cost Distributions for 5%, 10%, 15% 20% and 25% Improvements 

applied to an existing V-axis Clothes Washer 

Product Characterisics Total Total Incremental 

Percent Percentile MEF Variable Fixed Manufacturing 

Improvement Costs (j) Costs (q) Costs 

(b) cu . .ft./kWhlcycle ($per Unit) ($per Unit) ($per Unit) 

Baseline 0.817 

5 100 (Max.) 0.860 $0.24 $0.87 $1.11 

90 $0.01 $0.18 $0.18 

75 $0.01 $0.01 $0.02 

50 $0.01 $0.01 $0.02 

25 $0.01 $0.01 $0.02 

10 $0.01 $0.01 $0.02 

0 $0.00 $0.00 $0.00 

10 100 (Max.) 0.908 $6.75 $10.84 $12.84 

90 $1.26 $1.09 $2.71 

75 $0.49 $0.30 $0.96 

50 $0.01 $0.06 $0.07 

25 $0.01 $0.05 $0.06 

10 $0.01 $0.01 $0.02 

0 $0.00 $0.00 $0.00 

15 100 (Max.) 0.961 $40.00 $10.84 $46.19 

90 $3.96 $4.36 $14.08 

75 $0.76 $0.30 $0.97 

50 $0.65 $0.15 $0.80 

25 $0.58 $0.12 $0.72 

10 $0.01 $0.01 $0.02 

0 $0.00 $0.00 $0.00 

20 100 (Max.) 1.021 $70.00 $20.60 $79.45 

90 $27.78 $15.63 $38.48 

75 $14.13 $11.75 $27.74 

50 $0.72 $0.33 $1.06 

25 $0.65 $0.26 $0.95 

10 ($0.53) $0.24 $0.90 

0 ($12.20) $0.21 $0.80 

25 100 (Max.) 1.089 $83.28 $27.63 $102.63 

90 $70.40 $25.36 $93.97 

75 $67.24 $24.04 $90.85 

50 $63.46 $22.14 $86.26 

25 $15.11 $14.39 $29.37 

10 ($0.30) $14.07 $16.13 

0 ($12.20) $4.85 $1.28 

4-9 
Table 4.4 Industry Cost Distributions for 35%, 40%, 45% and 50% Improvements 

applied to a H-axis Clothes Washer 

Product Characterisics Total Total Incremental 

Percent Percentile MEF Variable Fixed Manufacturing 

Improvement Costs (j) Costs(q) Costs 

(b) cu. fl.lkWhlcycle ($per Unit) ($per Unit) ($per Unit) 

Baseline 0.817 

35 100 (Max.) 1.257 $280.00 $101.60 $381.60 

90 $228.80 $25.28 $254.01 

75 $118.63 $23.29 $143.34 

50 $69.06 $21.41 $90.56 

25 $63.59 $19.44 $85.30 

10 $60.38 $17.20 $81.74 

0 $52.03 $15.06 $67.43 

40 IOO <Max.) 1.362 $290.00 $101.60 $391.60 

90 $229.28 $25.28 $254.44 

75 $117.17 $23.30 $143.57 

50 $69.05 $21.41 $90.54 

25 $63.73 $19.44 $85.28 

IO $60.44 $17.15 $81.74 

0 $52.03 $15.06 $67.43 

45 100 (Max.) 1.485 $300.00 $101.60 $401.60 

90 $239.76 $28.23 $266.26 

75 $227.29 $23.70 $251.73 

50 $128.38 $19.89 $153.71 

25 $79.38 $18.02 $97.37 

IO $69.25 $16.95 $87.36 

0 $52.30 $15.06 $68.26 

50 100 (Max.) 1.634 $300.00 $I01.60 $401.60 

90 $239.46 $28.29 $266.11 

75 $227.31 $23.76 $251.70 

50 $132.89 $19.89 $157.87 

25 $95.45 $18.00 $113.81 

IO $84.95 $16.94 $102.98 

0 $66.16 $15.06 $82.12 

4-10 
•· 

The AHAM data submittal was used to develop a cost-efficiency graph. This graph is 

presented in Figure 4 .3 

AHAM Clothes Washer Data 

450 

400 

·~ - 350 

en 

en 

~300 

.... 

Cl) • 0 250 • • )( 

u 

I! 200 

c 

Cl) 

E 150 )( )( )/.. 

Cl) 

... - CJ 

I . .E 100 * ~ 4 ~ ~ 

50 • • • 4 !c ~ 0 . ~ 

,.._ CX> ..... ..... • 0) ,.._ N LO 

~ ..... ~ 0 ~ ~ ~ LO CX> 0) "'! ~ ~ c:i c:i c:i c:i ..... ..... ..... ..... ..... 

(Baseline) (5%) (10%) (15%) (20%) (25%) (35%) (40%) (45%) (50%) 

Modified Energy Factor 

Figure 4.3 Cost-Efficiency graph for clothes washers 

4.15 RETAIL PRICE 

4100% 

•90% 

)(753 

X50% 

{'125% 

•10% 

+0% 

The results of the Engineering Analysis are summarized in the Cost-Efficiency graph using 

pe:rcentile values, as presented in Figure 4.3. Manufacturer and retail markups, discussed in Chapter 

6 of this document, will be applied to these total incremental cost distributions to determine the 

purchase price (i.e. price to the consumer) of clothes washers. These consumer prices will then be 

used along with energy-use data to perform LCC analysis. 

4. 7 PROPRIETARY DESIGN 

At the November 1996 workshop, it was acknowledged that Whirlpool had four patented 

proprietary prototype designs which include both V- and H-axis platforms. Whirlpool indicated that 

these were working prototypes. In a letter dated November 29, 1996, DOE communicated the 

pa.tents numbers of Whirlpool's designs to the workshop participants. (DOE, No. 57). During the 

4-11 
workshop, Whirlpool asked that the designs be included in the rulemaking analysis. Whirlpool also 

indicated that it would be appropriate to conduct an independent study to estimate the manufacturing 

costs of the new designs. (Whirlpool, No. SSL at 169). Whirlpool did not see the practicality of each 

manufacturer estimating the cost of the Whirlpool designs, since estimates by other manufacturers 

would only be based on patent information and could not be expected to produce consistency in 

approach or a high degree of accuracy. (Whirlpool, No. 69 at 4). 

Maytag commented that the Whirlpool designs needed to be subjected to a full and complete 

engineering and cost analysis by DOE. Maytag requested that all manufacturers be given the 

opportunity to participate in this process since the cost of applying these designs to a manufacturer's 

own basic washer design varies greatly from manufacturer to manufacturer. (Maytag, No. 64 at 1 ). 

GEA also stated that the analysis needed to be expanded to cover the designs disclosed by Whirlpool. 

It further stated that only a revised method focusing on the technical know-how, manufacturing 

capabilities and economic strengths of individual manufacturers would permit the proper evaluation 

of the impacts on "atypical manufacturers." (GEA, No. 63 at 7). 

In response the Department conducted a ''tear-down" manufacturing cost assessment of one 

of the V-axis Whirlpool prototype. The main objective of the manufacturing cost assessment, is to 

quantify the differential manufacturing costs of producing high efficiency clothes washers based on 

(1) the Whirlpool proprietary V-axis design, and (2) commercially available V- and H-axis designs. 

See Chapter S for further details. 

4-12 
:REFERENCES 

L U.S. Department of Energy (DOE) 1997. Energy Conservation Program for Consumer 

Products: Test Procedure for Clothes Washers and Reporting Requirements for Clothes 

Washers, Clothes Dryers, and Dishwashers. 

2.. Association of Home Appliance Manufacturers (AHAM). December 2, 1997. Letter from 

Wayne Morris (Technical Director--Regulatory Affairs, AHAM) to Bryan Berringer 

(Program Manager, Clothes Washer Rulemaking, U.S. DOE). 

3. Crystal BallTM. 

4-13