B-i

APPENDIX B. TECHNICAL DESCRIPTION OF THE COST ESTIMATION

METHODOLOGY

TABLE OF CONTENTS

B.1 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

B.2 GATHERING PRODUCT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

B.2.1 Teardown of Physical Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

B.2.2 Catalog Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

B.2.3 Design Option Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2

B.3 CREATING A STRUCTURED BILL OF MATERIALS . . . . . . . . . . . . . . . . . . . . . . B-2

B.4 ADDITIONAL PRODUCTION COST DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-4

B.4.1 Labor and Factory Overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-4

B.4.2 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-4

B.4.3 Parts and Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-5

B.5 STRUCTURE OF THE COST MODELS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-6

B.5.1 Main Cost Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-6

B.5.1.1 Global Controls Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-6

B.5.1.2 Manufacturer Data Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-8

B.5.1.3 Purchased Parts Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-9

B.5.1.4 Bill-of-Materials Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-9

B.5.1.5 Equipment Data Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-10

B.5.2 Coil Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-11

LIST OF TABLES

Table B.3.1 Manufacturing Processes Captured in a BOM . . . . . . . . . . . . . . . . . . . . . . . . . B-3

LIST OF FIGURES

Figure B.3.1 Sample Structured Bill of Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-3

Figure B.5.1 Overall Model Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-6

Figure B.5.2 Sample of Global Controls Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-7

Figure B.5.3 Sample Table showing Major Sub-Assembly and Plant Overhead Costs . . . . . B-7

Figure B.5.4 Sample Data Fields from Manufacturing Data Sheet . . . . . . . . . . . . . . . . . . . . B-8

Figure B.5.5 Sample Raw Material Data Tables and Part Price List from the Purchased 

Parts Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-10

Figure B.5.6 Sample from Equipment Data Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-11

Figure B.5.7 Flow Diagram for Coil Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-12

Figure B.5.8 Coil Model Output Fields . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-13

Figure B.5.9 Coil Manufacturing Costs Calculated in the Coil Model . . . . . . . . . . . . . . . . B-13
B-1

APPENDIX B. TECHNICAL DESCRIPTION OF THE COST ESTIMATION

METHODOLOGY

B.1 INTRODUCTION

The manufacturing cost estimation methodology is a detailed, component-focused,

activity-based technique for rigorously estimating the manufacturing cost of a product, which

includes direct materials, direct labor, and plant overhead costs. 

This appendix describes the technical aspects of the approach as they apply to

commercial unitary air conditioners and heat pumps. Refer to chapter 5 in the body of the

Technical Support Document (TSD) for more information on assumptions and context. 

B.2 GATHERING PRODUCT INFORMATION

B.2.1 Teardown of Physical Units

The first step was to perform reverse-engineering, or teardowns, on equipment samples

that are typical of today’s commercial air-conditioning equipment. A teardown is a thorough

disassembly of the equipment, followed by a detailed inspection of the parts and subassemblies.

The unit selection process is described in detail in section 5.5.1.

There were a few cases where individual manufacturer practice differed from industrywide practice; DOE captured these differences in the analysis by using manufacturer-specific

assumptions. Sub-assembly allocation practice varies between manufacturers. For example,

some manufacturers stage sub-assemblies elsewhere and then add them to the final assembly

line, while others build all assemblies directly on the final assembly line. The Department

evaluated the typical practice and then assigned a range to account for any variation. Assembly

times varied on the order of minutes and were well within the uncertainty range of the analysis.

The Department also assessed standard industry practice with regard to outsourcing of various

manufacturing processes.

The Department disassembled representative units from different manufacturers, as

discussed in sections 5.4 and 5.5. The Department made every effort to perform the disassembly

in reverse of the actual assembly process, and the bill of materials (BOM) reflects the order of

these operations. From observations of industry practice, the Department assumed that major

sub-assemblies arrive pre-assembled at the final assembly line.

B.2.2 Catalog Information

In order to expand the sample size, the Department estimated the cost of several

additional units on the basis of catalog information. The Department selected representative

units, as described in sections 5.4 and 5.5, and obtained the necessary physical information from

drawings, descriptions, and tables publicly available in catalogs and supplementary component
B-2

information. Using the data and information gathered during the physical teardowns, the

Department was able to reproduce BOMs for the selected models and arrive at reliable cost

estimates.

B.2.3 Design Option Analysis

Although the Department had detailed information on the products considered in the

analysis, it was still interested in gathering data for those efficiency levels where products were

not commercially available - between an 11.5 and 12.0 energy efficiency ratio (EER). To

estimate the cost of equipment between 11.5 and 12.0 EER, the Department created

“hypothetical” units. For these units, the Department started from a calibrated teardown BOM,

and then modified the BOM to obtain the desired efficiency level. Typically, for any efficiency

level improvement, there are many design options available and different components that can be

used to achieve a particular efficiency level. This process is discussed in section 5.8 and in this

appendix.

B.3 CREATING A STRUCTURED BILL OF MATERIALS

The previous section described three ways to obtain physical information concerning

commercial unitary air conditioners and heat pumps at predetermined efficiency levels. After

gathering the product information, the Department characterized every part according to its

weight, dimensions, material, and quantity, and the manufacturing processes used to fabricate

and assemble it. 

A structured BOM consists of information and data concerning all materials,

components, and fasteners used in a unit and includes estimates of raw materials, purchased

parts, and sub-assemblies. The Department based its assumptions about the sourcing of parts and

in-house production on its previous industry experience, recent information in trade publications,

and discussions with high- and low-volume original equipment manufacturers (OEMs). To

reinforce its understanding of the industry’s current manufacturing practices, the Department

visited several manufacturing plants. These visits focused on observing and characterizing

current manufacturing practices. 

Figure B.3.1 illustrates a small section from a structured BOM. It shows:

1. Part number: Assigned during disassembly.

2. Description: A description of the part. The step-like outline approach identifies logical

groupings of parts to denote which go together where in the assembly

process. A reverse indentation denotes parts that are sub-assembled onto a

part prior to final assembly on the manufacturing line.

3. Category: Primary part material for raw material costing and sorting purposes.

4. V: This entry denotes whether a part is a purchased component or fabricated

in-house. The Department assumed that all plastic components were

outsourced. 
B-3

Part Category V OD or Length Depth Thickness Painted Weight Scrap Material LWor

No. Description ? # Width (in) Srfce A (lbs) % Cost, $ (s)

1.00 Cabinet Assy

1.01 Packaging Corner Screws Fastener Y 8 0.44 0.785 0.15 0.054 $0.08 16

1.02 Packaging Corners GCRS 4 4 4 1.125 0.055 1.527 $0.46 32

1.03 Sticker Misc. Y 1 5 8 $0.05 8

1.04 Outside Wrap HDPE Y 1 33.5 385.5 0.003 1.390 $1.30 15

1.06 Air Filter Panel Screws Fastener Y 2 0.44 0.785 0.15 0.014 $0.02 4

1.07 Air Filter Panel Fiberglass FG 1 22 29.875 0.75 0.600 $2.10 2

1.08 Air Filter Panel Stickers Misc. Y 2 2 5.5 $0.06 16

1.09 Air Filter Access Panel GCRS 1 23.5 30.75 0.5 0.04 10.036458 6.930 1% $2.10 8

1.10 Evap Fan Panel Screws Fastener Y 2 0.44 0.785 0.15 0.014 $0.02 4

1.11 Evap Fan Panel Fiberglass FG 1 18 30 0.75 0.477 $1.67 2

1.12 Evap Fan Panel Stickers Misc. Y 1 3.5 2.5 $0.03 8

1.13 Evap Fan Access Panel GCRS 1 18.5 29.5 0.5 0.04 7.5798611 5.738 1% $1.74 8

1.14 Condenser Panel Screws Fastener Y 2 0.44 0.785 0.15 0.014 $0.02 4

1.15 Condenser Panel Stickers Misc. Y 2 2.5 10 $0.10 16

1.16 Condenser Access Panel GCRS 1 18.25 30.75 0.5 0.04 7.7942708 5.725 1% $1.73 8

1.17 Top Cover Screws Fastener Y 6 0.44 0.785 0.15 0.042 $0.06 12

1.70 Top Cover Assy 15

1.18 Condenser Middle Panel Screws Fastener Y 3 0.44 0.785 0.15 0.021 $0.03 6

1.19 Condenser Middle Panel GCRS 1 3.25 31 0.5 0.035 2.0451389 1.320 $0.40 8

1.20 Large Condenser Grid Screws Fastener Y 3 0.44 0.785 0.15 0.021 $0.03 6

1.21 Large Condenser Grid GCRS 1 37.625 31 0.8099826 2.730 $0.82 8

Figure B.3.1 Sample Structured Bill of Materials

5. #: How many parts are assembled in a given assembly step.

6. OD, Length, 

 Depth, Thickness: Physical parameters that describe the finished part. 

7. Painted surface: Describes how many square inches of paint are required for each part. The

Department assumed that any plant would rely exclusively on pre-painted

steel and priced the paint coatings accordingly.

8. Weight: Final weight of part in pounds.

9. Material cost: Final material cost of the part (calculated), accounting for scrap losses but

excluding required assembly, painting, fabrication, and joining costs.

10. Labor: The manual labor (in seconds) required to handle all parts or assemble

them into the unit. Some parts, such as fasteners, require additional tool

time, which is accounted for in the later section of the BOM spreadsheet.

A structured BOM also captures the major manufacturing processes required to make

selected parts. Table B.3.1 lists these processes.

Table B.3.1 Manufacturing Processes Captured in a BOM

Fabrication Assembly/Joining

Fixturing Adhesive bonding

Stamping Spot welding

Brake forming Brazing

Cutting/shearing Press fitting

Collaring Integral fasteners

Deburring Other fasteners

Quality assurance
B-4

B.4 ADDITIONAL PRODUCTION COST DATA

The teardown process and development of the structured BOMs provided a starting point

for estimating production costs, but DOE still needed information on manufacturing operations,

part and material prices, wages, plant equipment amortization, and plant overhead. Section 5.6

describes the assumptions and data sources used for production activities and factory costs. This

section briefly describes the processes used to gather the data, and how the Department used the

data. 

B.4.1 Labor and Factory Overhead

The Department obtained information concerning equipment and tooling costs, typical

process cycle times, and materials used for fabrication from manufacturing databases compiled

during previous work. Plant equipment suppliers provided the Department with details

concerning equipment capabilities and processing parameters (e.g., cycle times, scrap rates).

Fabrication cycle rates, which depend on the complexity of a part and the processes used, are

directly entered into the model.

B.4.2 Depreciation

Depreciation and amortization are used to allocate capital costs to production over a

certain period of time. For example, if a manufacturer produces one million air conditioners over

ten years and amortizes a $10 million investment over the same ten years, each air conditioner

produced during that time would include $10 in amortization charges. The methodology that the

Department used to allocate depreciation depended on its assumption as to whether or not a

particular piece of plant machinery was dedicated to the production of a product. Dedicated

machinery is machinery assumed to be tied solely to the production of the product. During times

when a piece of dedicated machinery is not needed for that product, it sits idle. The capital cost

of a piece of dedicated machinery is amortized across the annual production volume of the

product. Conversely, non-dedicated machinery can be used to produce different products and is

not likely to sit idle. Only a fraction of the capital cost of non-dedicated machinery is allocated to

a particular product; this fraction is based on the time the machinery is used to produce that

product. For example, a non-dedicated press that was used 55 percent of the time to produce a

particular product would have 55 percent of its depreciation charges allocated to that product and

45 percent of the charges allocated to any other products for which it is used. A dedicated press,

on the other hand, would have 100 percent of its depreciation allocated to a single product, even

if its utilization rate was only 55 percent, because the press would not be used for any other

production. 

The Department assumed that fabrication machinery was non-dedicated, unless it was

part of an assembly line (e.g., welding directly on the line). Because of the seasonal nature of the

air-conditioning business, some manufacturers have off-season uses for their fabrication

machinery; for example, some may use it to make furnaces in the winter.
B-5

In addition, DOE allocated labor costs to the operation of machinery based on whether

the machinery was dedicated or non-dedicated. 

In general, as machinery utilization rates approach 100 percent, the costs associated with

dedicated and non-dedicated machinery become equal. However, few dedicated pieces of

machinery ever achieve 100 percent utilization because of lack of demand, capacity mismatches

between process steps, and scheduled downtime. Thus, non-dedicated machinery results in lower

overall costs per part, since depreciation, maintenance, and other costs are only assessed

according to the amount of time the machinery is used to produce a particular part. As types of

products vary, so do their manufacturing machinery and labor requirements. Also, depreciation

charges vary across product types.

B.4.3 Parts and Materials 

The Department obtained cost estimates for raw materials and purchased components

from manufacturing databases compiled during previous work, and supplemented them with

information obtained from manufacturer and supplier sources. The Department adjusted the cost

estimates as appropriate to include price discounts typically seen in the industry as the result of

high-volume purchases.

Because purchased components make up much of the unit costs, DOE gave special

consideration to establishing accurate OEM-level price data. Through manufacturer submissions,

industry literature, and active research, the Department was able to ascertain the exact

specifications for the majority of components used in the units under investigation. For the

relatively few purchased components the Department could not identify, it substituted parts from

comparable equipment.

For example, a manufacturer’s technical data sheet might indicate that an air-conditioner

product uses a certain type of motor supplied by a particular company, but may not state the

precise size or part number. In the cases where distributors could not positively identify the part,

the Department compared the known attributes of similar units (e.g., horsepower, torque, frame

size, voltage) with those of the equipment under question. The Department then selected a

specific motor size and type based on an interpolation of the available data. 

The Department then consulted local distributors, wholesalers, parts suppliers, and OEMs

to determine high-volume pricing. The Department applied a discount to the prices it received

from each of those sources, based on their place in the distribution chain. The Department based

these discounts on markup data and previous experience in the industry. The many different data

sources and the large purchased-parts list also allowed for some cross-checking of price data and

discounts. The Department selected those that most likely reflected actual prices to OEMs. The

discounts on each component were a function of the total dollar volume of a typical OEM’s

account with a typical supplier. When the Department modeled high volume OEMs who deal

with one supplier for each component, this resulted in substantial discounts relative to retail or

wholesale prices.
B-6

Global

Controls

Page

Purchased

Parts Page

Coil Model

(separate)

Mfg

Data Page

BOM

Page

Request for

Information

Coil

descriptions

Component

descriptions

Raw materials

costs & densities

Cost data

Cost

data

Coil model and

Raw material costs

Coil model

Depreciation

Labor costs

Indirect materials

Individual unit and

component descriptions

Output and other

working parameters

Equipment

Data Page

Equipment Cost

Depreciation life

Equipment dedication

Required fab. labor

Indirect materials costs

Output and other

working parameters

Purchased component

costs and weights

Figure B.5.1 Overall Model Structure

B.5 STRUCTURE OF THE COST MODELS

Once the Department had collected all of the information required to estimate production

costs for each product, it used spreadsheet models to perform the required calculations. The

Department calculated the costs for each commercial air-conditioning unit with the help of two

cost models: the main model and the coil model. Figure B.5.1 illustrates the structure and

relationship of the spreadsheets that comprise these two models.

B.5.1 Main Cost Model

The main model holds data and performs the calculations that determine the production

cost of the final assembled equipment. It contains worksheets that perform different functions.

B.5.1.1 Global Controls Sheet

This worksheet sets parameters, such as production volume and wages, while displaying

the cost results by sub-assembly. The basic parameters (e.g., days available per year) of the

Global Controls page are linked to the coil model. A sample section of those controls is shown

below in Figure B.5.2.
B-7

Figure B.5.2 Sample of Global Controls Page

Unit Cost Condensing Ev aporator Controls Misc. Condenser Ev aporator Total

($/unit) Unit Unit Coil Assy Coil Assy

Assy Labor Cost

Fabrication Labor

Indirect Labor Cost

Direct Material Costs

Indirect Material Costs

Ann Equipm Dep

Ann Bldg Dep.

Equipment Maintenance

Utilities

Taxes

Insurance

Total

Figure B.5.3 Sample Table showing Major Sub-Assembly and Plant Overhead

Costs

The Global Controls page also shows costs broken down by sub-assembly and cost

category. The results are shown in the form of a table (Figure B.5.3) that features costs by major

sub-assembly and cost type by efficiency level. Another, more detailed table is also available in

the spreadsheet but is not shown in this appendix. Cost breakdowns to this fine level enabled

discernment of the differences between equipment across efficiency levels and facilitated the

calibration and industry review processes.
B-8

Efficiency level (SEER)

Condensing unit model no.

Fancoil unit model no.

Exact SEER

Capacity (BTUH)

Nominal refrigerant charge (lb)

Condensing Unit

Weight (lb)

Cabinet

Dimensions (l x w x h), (in)

Sheet metal gauge

Compressor

Make & model number

Accumulator? (make/model)

Muffler? (make/model)

Crankcase heating? (method)

Fan CFM

Number of blades

Blade diameter

Motor horsepower

Motor RPM for each speed

Coil

Face area (ft2)

Tube spacing (in)

Tube rows

Tubing

Material

Diameter (in)

Thickness (in)

Rifled?

Fins

Material

Surface enhancement? (specify)

Dimensions (l x w x thickness)

Density (fins/in)

Expansion Device

Type

Make & model (if applicable)

Dimension (if applicable)

Reversing Valve (make/model)

Unit Descriptions

C

O

N

D

E

N

S

E

R

Evaporating Unit

Weight (lb)

Cabinet

Dimensions (l x w x h) (in)

Sheet metal thickness (in)

Fan

Number of blades

Blade diameter

Fan Motor CFM

Horsepower

RPM for each speed

Variable speed controller? (type, make, 

model)

Coil Height

Configuration

Face area (ft2)

Tube spacing (in)

Tube rows

Tubing

Material

Diameter (in)

Thickness (in)

Rifled?

Fins

Material

Surface enhancement? (type)

Dimensions (l x w x thickness) (in)

Density (fins/in)

Other Devices

Time delay relay? (type, make/model)

Liquid line solenoid? (make & model)

Filter/dryer? (make, model)

Demand defrost? (method)

O

T

H

E

R

E

V

A

P

O

R

A

T

O

R

Figure B.5.4 Sample Data Fields from Manufacturing Data

Sheet

B.5.1.2 Manufacturer Data Sheet

The data tables in this worksheet define most equipment-specific attributes of the

commercial air-conditioning samples. For example, coil parameters are stored here for use by the

coil model, and the quantity, weight, and cost results from the coil model are returned. These

values are then stored for use by the BOM and Global Controls worksheets.

The headings in Figure B.5.4. show the type of information available in the manufacturer

data sheet. Other data tables capture parameters such as cost per hairpin tube and volume of

enclosure. These parameters form the basis for several calculations. For example, in the Global

Controls page, the total enclosed volume of a commercial air-conditioning unit drives the size of

the manufacturing facility and the assembly line. This reflects the assumption that, all else being

equal, a plant dedicated to producing larger equipment requires more storage and assembly space

than a plant dedicated to producing smaller equipment.
B-9

B.5.1.3 Purchased Parts Sheet

Three types of data are found on the Purchased Parts page: major purchased components

unique to each model; minor, common purchased components used by every model; and raw

material costs for parts that are fabricated in-house.

Major Purchased Components

Every major purchased part has its own data table, and every sample draws its

information from a line item in its table. The exact model numbers for major purchased parts are

entered here along with multiple price quotations and part weights in pounds. The quotations

come from multiple sources and are discounted as appropriate. These tables determine at least 45

percent of total cost. The weight and minimum cost for each line item is passed to the BOM

page, which queries the results by unit number. 

Minor, Common Purchased Components

These include items such as connectors, wire, fasteners, board transformers, and other

smaller parts that OEMs are likely to purchase from outside suppliers. The Department gathered

price quotations from multiple sources (suppliers, distributors, prior experience) in quantities

that are typical for OEMs. The Department then used the lowest price for the BOM entry.

Raw Material Costs

When parts are made in-house from materials such as pre-painted sheet metal, the main

model estimates the cost of the part from the cost of its raw material. The Department obtained

raw material prices from common suppliers in volumes typical for OEM requirements. The

BOM scales the material price for each fabricated part based on the calculated weight of the part

and its price per unit of weight.

The Department assumes that OEMs fabricate most of these parts themselves. One

general exception is plastic parts, which require a different set of skills and facilities than typical

OEMs possess. The price of a plastic part is a function of the underlying value of the resin, and

an assumed cost to manufacture the part (including the tool) plus an applied gross margin. A

purchased part premium applies to any fabricated part, including a plastic part, that is

manufactured elsewhere. The purchased parts premium is set at 150 percent over the underlying

material cost. Given that few parts meet this description, this simplification has only a slight

impact on the overall cost estimate for the equipment.

B.5.1.4 Bill-of-Materials Sheet

The BOM (as illustrated in Figure B.3.1 and discussed in section B.3) serves as a

structured assembly tree, summarizes fabrication and assembly tool data, and calculates
B-10

Figure B.5.5 Sample Raw Material Data Tables and Part Price List from

the Purchased Parts Sheet

production costs based on the price of the part or material and the labor and machinery required

to fabricate or assemble it. 

The BOM sheet also adjusts many other costs in response to changes in physical

parameters. For example, the model adjusts baseline sheet metal sizes to incorporate different

enclosure sizes. The size of the fiberglass (FG) insulation is a function of the sheet metal it has to

cover and the efficiency level of the unit. For example, insulation is thicker at higher

efficiencies. Fastener quantities and labor costs are also a function of the sheet metal walls they

are to secure. The result is that every unit cost estimate is unique, using the initial BOM as a

starting point.

Labor, parts, materials, and depreciation costs are aggregated by sub-assembly and linked

back to the Global Controls page. Figure B.5.5 is a sample of a raw material data table and part

list from the purchased parts sheet.

B.5.1.5 Equipment Data Sheet

Figure B.5.6 is a sample from an equipment data sheet and lists the installed costs for all

the plant machinery involved in the production of the commercial air-conditioning unit samples.

An implicit assumption is that the plant equipment required to produce lower-efficiency samples

is also able to produce higher-efficiency samples without any modification. The equipment data

show installed equipment costs, depreciation life, whether equipment is dedicated, labor

requirements per station, and consumables costs. The installed costs include price quotations for

the equipment plus markups to account for installation labor and auxiliary equipment.
B-11

Powder Lg Press Med Press Sm Press

Fixturing Coating (1500 ton) (600 ton) (100 ton)

$231,105 $0 $2,734,747 $1,309,597 $153,814

5 12 20 15 10

$58,250 $0 $172,322 $110,027 $19,384

$79,811 $0 $437,561 $232,148 $33,312

Y N NN N

1.00 0.00 1.50 1.00 1.00

See Below $0.20 $0.10 $0.05

Dedicated Equipnment?

People per Machine

Consumables Cost ($/sec)

Equipment Cost ($/Unit)

Depreciation Life

Straight Depreciation per piece of Equipment / Year

Finance Cost per piece per year

Figure B.5.6 Sample from Equipment Data Sheet

B.5.2 Coil Model

The coil model converts each coil’s physical descriptors into coil costs by calculating the

number of fins, hairpin bends, U-bends, take-offs, and coil ends. The model accounts for tube

diameters, spacing, material choices and thickness, rifling, and other physical characteristics that

affect coil cost. It relies on a process-based cost model that accounts for every fabrication and

assembly step. The Department obtained fabrication equipment costs and processing times from

equipment vendors, and obtained raw material prices from vendors, based on their pricing at the

time. 

The coil flow diagram (Figure B.5.7) represents a coil manufacturing facility sized for

high-volume production. While this coil line may not be representative of all manufacturing

facilities, it is representative of the industry in general. 

The coil and main cost models work together. The equipment data sheets in the main

model supplied the coil parameters, and the coil cost and weight results were returned to the

main cost model. Any update in either model is automatically reflected in the other.
B-12

Fin Line

Hairpin

Bender

Expander

Sizing &

Ring

Machine

Return

Bend

Cleaner

Return

Bender

Stamp Coil

Ends

Leak

Testing

Brazing

Oven

To Mfg

Line

Lacing

Table

Return

Bend

Insertion

Copper

Coil Stock

Al Fin

Stock

Copper

Coil Stock

GCRS Coil

End Stock

Figure B.5.7 Flow Diagram for Coil Model

Figure B.5.8 is a section of a row header for an indoor coil unit showing fin and U-bend

parameters. Weights and quantities are sent to the Manufacturing Data Sheet in the main model.
B-13

Final Mass of Single Fin (lb)

# of Fins per Unit

Annual Fin Production (K)

Evap. Coil Fin Material

Evap. Fin Material Scrap (%)

Evap. Coil Fin Length (in)

Evap. Coil Fin Width (in)

Evap. Coil Fin Thckness (in)

Evap. Coil Density (fins/in)

# of Large U-Bend per Unit

Mass per U-Bend (lb)

# of U-Bends per Unit

Annual Production of U-Bends (K)

Length of U-Bends (in)

# of Coil Ends

Mass of each Coil End

Figure B.5.8 Coil Model Output Fields

1 2 3 4 5 6 7 8 9 10 11

Indirect Maintenance Utilities

Direct Indirect Coil Ends Tube Fin U-Bend Materials Equipment Bldg

Condenser Assy

Low Level Labor Material Prices Depreciation

Figure B.5.9 Coil Manufacturing Costs Calculated in the Coil Model

The manufacturing costs for coils are also captured in a table. Figure B.5.9 illustrates the

header of the table that is linked back to the Manufacturer Data Sheet. Some of these costs are

direct costs, such as material costs used by the BOM Sheet, while others are overhead costs

referenced by the Global Controls page.