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

Instructor:	Dr. Peter Sandborn
Office:	ENG 3127
Phone:	(301) 405-3167
Email:	sandborn@eng.umd.edu
Office Hours:	12:00 – 1:45 PM, Monday, 1:00 – 1:45 PM, Wednesday

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: process-flow, 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 end-of-life 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 non-electronic 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
    • Non-recurring cost
  • Quality
  • Yield
  • Yielded Cost
  • Overhead
  • Design-to-Cost
  • Life Cycle
• Product Life Cycle
  • Requirements Capture
  • Concept (Bid)
  • Design and Development (Qualification)
  • Production (manufacturing)
  • Marketing and Sales
  • Sustainment
  • End-of-Life

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
  • Process Flow
• The wafer fabrication process
  • Basic process sequence
  • Number-up
• Fundamental process step description
  • Labor
  • Materials
  • Tooling
  • Equipment/facilities
  • Wafer probe
• Stringing together process steps
  • Rolling up costs

4 - Yield

• Defects
  • Defect density
  • ppm
  • Sources of defects (classification)
  • Accumulating defects
• Yield
  • Concept & definition
  • Relationship between defects and yield
    • Discrete
    • Non-discrete
      • 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. process-flow 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

• Life cycle

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
• Eco-economics
• Life Cycle Analysis (LCA)
  • Inventory analysis
    • Material-centric cost modeling
  • Impact assessment
• Disassembly
  • Types of disassembly (reversible, irreversible)
  • Quantitative measurement of disassembly
    • Energy for disassembly
    • Entropy of disassembly
• Recovery
• Recycling
  • Recycling legislation
• Product stewards
• End-of-Life (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. Ferris-Prabhu, Introduction to Semiconductor Device Yield Modeling, Artech House, 1992.
• G. A. Hazelrigg, Systems Engineering: An Approach to Information-Based Design, Prentice Hall, 1996.
• M. J. Harry and J. R. Lawson, Six Sigma Producibility Analysis and Process Characterization, Addison-Wesley, 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, 10:30-12:30

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).

Make-Up Exams:
Make-up 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.