.- *f~~~~~J *. **. '.-

Manufacturing Costs for Clothes Washer U.SDepartment of Energy -Cl ~ t - .W -a_~ .s -,_Workshop Office of Energy Efficiency Clothes Washers . - andRenewableEnergy

July 23, 1997 1000 Independence Avenue, SW

Washington, DC 20585

Approaches to Data Gathering, Reporting and Statistical

Treatment -
Clothes Washer Workshop: Manufacturing Costs

Introduction

'I Where costs are used

- Life-cycle cost analysis

- Manufacturer impact analysis

v/ · Need for new cost information

- Update/validate current information

- Recent experience with new technologies

Consideration of Whirlpool technologies

-Compliance with the Process Rule

.DRAFT Ju 9. 1997 2

r *.-'**. *-
Clothes Washer Workshop: Manufacturing Costs

Data Collection Issues

V Data collection timetable

V Characterizing uncertainty in manufacturing costs

V. Variability between manufacturers for GRIM analysis

Vy Costing approach/Engineering analysis

Consideration of Whirlpool prototype

\ -

-.DRAFT Juy9.1997 3
Clothes Washer Workshop: Manufacturing Costs

Data Collection Timetable

J Importance of a finalized revision to the test procedure

dV Establishment of a baseline MEF value

VI 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)

DRAFT Ju 9. 1, 4
Clothes Washer Workshop: Manufacturing Costs

Characterizing Uncertainty in Manufacturing Costs

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.

DRAFT Ju 91997 5
Clothes Washer Workshop: Manufacturing Costs

Illustrative Input Distributions for Incremental Manufacturing Costs

Efficiency '

Level 1 -

0 1 2 3 4 5 6 7 8 Manuf- Manuf- -Mkt. Mkt.

In c re menta I C o s t ($) acturer Share Legend

A 50%

Efficiency ' B 30%

Level 2 - . --

^---^ ^^^-I ^^~-C 20% --

O' 1 2 3 .4 5 6 ., 7 8

Inc remental Cost(S).

-- * * ' " . ~ . . . - /' '** \ ' * .' ** * , * *./ .

Efficiency /

Level 3

0 1 2 3 4 5 6 7 8

In c rem e n ta I C ost ($)

·. . t . .

Manufacturers can specify the minimum, most likely, and maximum

costs of achieving a particular efficiency level.

-- - ,.~ -; ' :- D'RAFTJuly 9. 1997 6

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Clothes Washer Workshop: Manufacturing Costs

Cost - Efficiency curves can be constructed for various percentile

values indicating % of shipments below a certain cost.

$7.00

90% $6.00- 90 % 75%

50%

$5.00- · = 25%

10%

a $ 4 .0 0 L

$3.00-

$2.00

$1.00

'* 1 - - '2 . 3

Efficiency. Level

DRAFT Jy 9. 1997 9
Clothes Washer Workshop: Manufacturing Costs

Variability between Manufacturers for GRIM Analysis

% .

* Shipment weighted cost distributions for the industry can be directly

input to GRIM.

^ 4The Department is seeking additional input on the mechanics of

performing sub-group or manufacturer specific GRIM analysis.

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

stakeholders.

DRAFT Jul9.1997 10
Clothes Washer Workshop: Manufacturing Costs

Characterizing Uncertainty in Manufacturing Costs

.1 Samples drawn from manufacturer distributions to create an industry

distribution.

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

for all efficiency levels.

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

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

DRAFT J 9, 1997 7 k -
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 . l ll. 1 *

-Level 1 -

000 0

1.75 $2.25 $2.75 $3.25. $3.75

Forecast: W Avg Var Cost Lvl 2 Sampling of cost

1,000Trials FrequencyChart 2Outliers distributions with

, ' .02,0 ---- _ _ F -l -- 2[o25 application of market

Level2 Efficiency ' 1 .iIlII i IJ ' i share6 share weights resultsl results ,; e,.007 ,Hlllll1 bI.1-,i6.75 . industry cost-

.000 sdod, o. 0 distributions for each $2.75 $3.31 $3.68 $4.44 $5.00

efficiency level

Forecast: W Avg Var Cost Lvl 3 .

1,000 Trials . Frequency Chart 0 Outliers * ..

.024 24

1 o,,- . J|||J .i 1-1-- f:- 1 ;

Efficiency 0 .012 1

Level 3 LI II

- , , , oo I b-F .- - I, L " 000 0

| . $4.00 C4.75 s6.25 D R.0 | -, R5.50 

Cost ... DAFT

W * *~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Clothes Washer Workshop: Manufacturing Costs

Costing Approach/Engineering Analysis

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

V/ 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.

. '.;DRAFTJUI. 1997

· DRAFT ,.y 9,1997
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.

i' AHAM has requested a modification to the survey instrument in

H.e order to segment the costs of Tooling, Investment, Research'and

Development, and Marketing.

' A More specific definitions of these and other cost categories has

been prepared by DOE.

DRAFT July 9. 1997 12
4 " , , '

Clothes Washer Workshop: Manufacturing Costs

Consideration of Whirlpool Prototypes

4/ AHAM members believe it is not appropriate for them to comment

on the cost/efficiencies of Whirlpool designs.

V 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.

-i~ ~~DFu. .

... . . ... 1

DRAFT July . 1997 13
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.

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

'"'I* ."DRAFT 1997 14

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..' ' . DRAFTjuly9. 1997 14 " . ; '. ^** ' ' * ': . ,* '' \ *