Function-based cost estimation integrating quality function deployment to support system design
When designing a new system, often cost is a critical factor in determining whether the system will be carried out or not. For assessing the feasibility of a system being developed in future, estimating the cost of system in the conceptual phase becomes more and more important. This paper presents a cost estimation method based on function characteristics and the technique of quality function deployment (QFD). The cost structure of systems is first determined according to four cost items: the direct material cost, the direct labour cost, the variable factory overhead and the fixed factory overhead. Based on the cost structure, the total costs of some well-known competitive products of the developed system are then investigated. The function levels of these well-known products are identified one by one by means of the QFD technique. By integrating the information about the competitors costs and the function levels, a set of cost factors which are used to evaluate the system costs is derived by using the least-square-method. As a result, the total cost of the designed system can be estimated quickly through simple steps of calculation. Furthermore, the successful probability of a system being designed within someone budget can be assessed in advance.
cost estimation system design quality function deployment (qfd)