Product and System Cost Analysis (ENME 770)

University of Maryland, Department of Mechanical Engineering

[Description] | [Relationship to Other Cost Analysis Courses] | [Prerequisites] | [Instructor] | [Text] | [Outline] | [Short Course]



The objective of this course is to provide students with an in-depth understanding of the process of predicting the cost of systems. Elements of traditional engineering economics are melded with manufacturing process modeling, life cycle cost management concepts, and selected concepts from environmental life cycle cost assessment to form a practical foundation for predicting the real cost of electronic products.

Various manufacturing cost analysis methods are included in the course: process-flow, parametric, cost-of-ownership, and activity based costing. The effects of learning curves, data uncertainty, test and rework processes, and defects are considered in conjunction with these methodologies. In addition to manufacturing processes, the product life cycle costs associated with design, procurement, manufacturing waste, sustainment, and end-of-life are also addressed.  This course uses real life design scenarios from integrated circuit fabrication, electronic systems assembly, substrate fabrication, and testing at various levels.

This course uses real life design scenarios from  electronics, including: integrated circuit fabrication, electronic systems test and assembly, and printed wiring board fabrication.  Portions of this course are described in:

P. Sandborn, J. Myers, T. Barron, and M. McCarthy, "Using Teardown Analysis as a Vehicle to Teach Electronic Systems Manufacturing Cost Modeling," International Journal of Engineering Education, Vol. 25, No. 1, 2009, pp. 42-52.

P. Sandborn, D. T. Allen, and C. F. Murphy, "New Course Development in Products and Systems Cost Analysis," Proc. of the Electronic Components and Technology Conference, pp. 1021-1026, May 2000.

P. Sandborn and C. F. Murphy, "Progress on Internet-Based Educational Material Development for Electronic Products and Systems Cost Analysis," in Proc. of the Electronic Components and Technology Conference, May 2001, pp. 1261-1266.

Relationship to Other Cost Analysis Courses

Other cost analysis courses are taught within the engineering departments of most universities including engineering economics and life cycle cost analysis.  Both of these areas are important, but neither provides the complete cost analysis background that is needed by design engineers.

Engineering economics treats the analysis of the economic effects of engineering decisions and is often identified with capital allocation problems.  Engineering economics provides a rigorous methodology for comparing investment or disinvestment alternatives.  Alternatively, this course focuses on the detailed cost modeling necessary to supply engineering economic analyses with the inputs required for investment decisions.

Life cycle cost management (LCC) courses traditionally focus on "program" level cost analyses broadly used in the defense community, i.e., LCC provides the background necessary to manage costs associated with large government system contracts. LCC's view of the world is that while manufacturing operations (fabrication, assembly, and test) are important, life cycle issues (qualification, maintenance, upgrade, obsolescence, design, reliability, acquisition) represent the thrust of the analysis - and this is appropriate for complex systems with long field lives like aircraft and tanks. LCC is also appropriate for the electronics industry in the area of manufacturing equipment and facilities.  In fact, the widely accepted cost-of-ownership model is a permutation of LCC.  However, LCC has not found wide acceptance for high-volume, time-to-market driven commercial products. Most commercial products have different cost drivers than defense systems and equipment; commercial product cost analysis is driven by detailed analysis of fabrication/assembly/test costs and less by life cycle costs.

The objective of this course is to focus on the detailed fabrication/assembly/test cost analysis that the commercial world uses and mix in key concepts from LCC and environmental cost assessment that the commercial world may not be considering today but should.



Peter Sandborn


P. Sandborn, Course Notes on Manufacturing and Life Cycle Cost Analysis of Electronic Systems, CALCE EPSC Press, 2005.

The following supplemental references are used:



Manufacturing Cost Analysis

Life Cycle Cost and Analysis (LCC and LCA)

Short Course

The product and system cost analysis course is also offered as a 2-3 day short course for industry.  The short course can be customized to the needs of the customer and cover any subset of the information contained within the complete course.  See link for more information.

Peter Sandborn
University of Maryland
Last Updated: April 14, 2009
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