ABSTRACT
Early cost estimation plays an important role in the product development cycle. It has been widely reported that 70-80% of the product costs are committed during the design stage although only a small proportion of the total product costs has actually been incurred [1-3]. Therefore, there can be significant savings in product costs, as well as improved productivity and product quality, if necessary changes of the product are made in the early design stage. In order to achieve this, the product cost must be estimated fairly accurately even in the early design stage. Traditionally, the cost of a product is derived by the summation of the various cost components such as the material cost, machining cost, directly labor cost, administration, and engineering cost. However, this requires information not only on a detailed product design but also its process plan and indirect cost factors that are not available in the design stage. A product cost estimation method based on the design information is therefore a necessary step to help the designer achieve good trade-off decisions.
