Final Grades (Fall 1999)
ENME 808S 
Product and System Cost
Analysis 
Fall 1999 
Lecture: 2:00–3:15 PM Monday and Wednesday, Woods Hall 1127
Course Description:
The objective of this course is to provide students with an in depth
understanding of the process of predicting the cost of systems. This course
melds elements of traditional engineering economics with manufacturing process
modeling and life cycle cost management concepts to form a practical foundation
for predicting the cost of commercial products.
Methodologies for calculating the cost of systems will be presented. Various
manufacturing cost analysis methods will be studied, including: processflow,
parametric, cost of ownership, and activity based costing. The effects of
learning curves, data uncertainty, test and rework processes, and defects
will be considered. In addition to manufacturing processes, the product life
cycle costs of design, maintenance, design for environment, and endoflife
costs will also be discussed. Special attention will be given to the treatment
of risk by considering the economic impact of obsolescence, reliability,
liability, and market window on the system’s life cycle cost.
This course will use real life design scenarios from integrated circuit
fabrication, electronic systems assembly, and various nonelectronic product
assemblies. Students will be required to complete a project involving cost
modeling of a product.
Detailed Course Outline:
INTRODUCTION
1  Introduction and Basic Concepts

Motivation

Basic concepts

Price

Cost

Recurring cost

Nonrecurring cost

Quality

Yield

Yielded Cost

Overhead

DesigntoCost

Life Cycle

Product Life Cycle

Requirements Capture

Concept (Bid)

Design and Development (Qualification)

Production (manufacturing)

Marketing and Sales

Sustainment

EndofLife
2  Engineering Economics

Engineering economics

Definition

Overview

Relationship to this course

Accounting Methods
MANUFACTURING COST ANALYSIS

Hierarchy of modeling approaches
3  Process Flow Analysis

Definitions

The wafer fabrication process

Basic process sequence

Numberup

Fundamental process step description

Labor

Materials

Tooling

Equipment/facilities

Wafer probe

Stringing together process steps
4  Yield

Defects

Defect density

ppm

Sources of defects (classification)

Accumulating defects

Yield

Concept & definition

Relationship between defects and yield

Discrete

Nondiscrete

Probability distributions (Poisson, Murphy, Seeds)

Rolling up yields

Cost of yield loss

Example: Sawing wafers (Wafer to die mapping)
5  Six Sigma

Concept

Cp and Cpk

Relationship to yield
6  Cost of Ownership (COO)

Concept

History

Goal

Motivation  what's wrong with the process flow approach

A COO Model

3 contributions to COO

Basic models associated with each contribution

Example: Electrovert machine

The COO equation
7  Activity Based Costing (ABC)

Small manufacturing firm problems

Basic premise of ABC

ABC steps

Terminology

Example: machine A vs. machine B

ABC vs. processflow based cost analysis
8 Parametric Cost Modeling

The parametric modeling paradigm

Cost Estimating Relationships (CERs)

Work/Estimating Breakdown Structures (WBSs/EBSs)

Contract Work Breakdown Structures (CWBSs)

Development of parametric models

Calibration

Normalization

Curve fitting (regression analysis)

Demonstration of PRICE Systems software tools
9  Test Economics

Introduction  basic questions

Fault spectrum

Fault coverage

Explanation

Relating fault coverage to yield

Example of how not to use fault coverage

Defect clustering  Williams Brown model

Process flow implementation of testing steps

Scrap

Cost of scrap (pass fraction, escape fraction, etc.)

False positives

Wafer probe

Test throughput rate

Test pattern generation

What are test patterns

Test pattern generation costs

Design for test (DFT)

Concept

Area overhead vs. test coverage (cost)

Known Good Die (KGD)
10  Rework

Process flow implementation of rework steps

Basic (single pass)

Multiple rework cycles

Real world rework
11  Monte Carlo Analysis

Concept

Random number generation

Implementation

Flow chart

Sampling a distribution

Triangular distribution example

Confidence level calculation
12  Learning Curve

Introduction

80% Learning Curve Example (Crawford Model)

Sample Learning Curves

Industrial Learning

Wright Model

Example

Understanding the difference between the Crawford and Wright models

Learning curve math

Slide property

Relationship between B and the % learning

Midpoint formula

Sources of learning curves

Determining learning curves from actual data

Simple unit data

Block data

Iterative midpoint method

Using learning curves in cost modeling
LIFECYCLE COST ANALYSIS
13  Market Window

Profit vs. schedule

Cost of schedule delays

With market products

Ahead of market products
14  Design for Environment

Goal and definition

Drivers

Ecoeconomics

Life Cycle Analysis (LCA)

Inventory analysis

Materialcentric cost modeling

Impact assessment

Disassembly

Types of disassembly (reversible, irreversible)

Quantitative measurement of disassembly

Energy for disassembly

Entropy of disassembly

Recovery

Recycling

Product stewards

EndofLife (EOL)

Demonstration of the Salvage tool
15  Obsolescence

Lifecycle phases of an electronic product

Definition of obsolescence and discontinuance

Analysis approach

Mitigation strategies
Text: None.
Materials on Reserve:

Lecture notes and homework solutions

V. FerrisPrabhu, Introduction to Semiconductor Device Yield Modeling,
Artech House, 1992.

G. A. Hazelrigg, Systems Engineering: An Approach to InformationBased
Design, Prentice Hall, 1996.

M. J. Harry and J. R. Lawson, Six Sigma Producibility Analysis and Process
Characterization, AddisonWesley, 1992.

Other materials will be added to this reserve as needed
Web Site: http://www.glue.umd.edu/~sandborn/courses/lcecon.html
Class Examination Dates:

Midterm – Approximately October 28, 1999

Project Due – Approximately December 13, 1999

Final Exam – Saturday December 18, 1999, 10:3012:30
Grading Policy:

35% Homework

20% Midterm

20% Project

25% Final Exam
Homework:
The course expects to assign approximately one homework problem per week.
Homework assignments will be collected in the first 10 minutes of the lecture
on the day the assignment is due. Late homework will be marked 10% off if
it is handed in before solutions are posted, 50% off after solutions are
posted.
Homework Format:

Use one side of the paper only

Pen or pencil

Staple pages together

All pages numbered at the top (e.g., 1/3 means page 1 out of 3)

Student name must appear at the top of every page

Box your answers

Answers must include units (if applicable)

Neatness counts – if I can’t read it, I won’t grade it

Show all your work (no work, no points).
MakeUp Exams:
Makeup exams are only allowed for justifiable reasons if notified in advance
(i.e., University approved religious observance) or with a documented reason
for an unnotified emergency absence (i.e., family or medical emergency).
Homework Solutions:
On reserve in the engineering library.
Monte Carlo Homework solution.