ABSTRACT
In addition to designing and manufacturing products at the required level of quality, manufacturers must also be able to sell their products at competitive prices and make profits while preserving the environment. This chapter discusses the economics and environmental impact of manufacturing products. The costs of materials and manufacturing should be optimized since they usually represent about 30%–70% of the total product cost. However, selecting a cheaper material may not always give a less expensive product as it may be more economic to select a more expensive material with better processability and save on manufacturing cost. Processing cost consists of direct labor cost, cost of using equipment, cost of tooling and production aids, and overheads. Using time-saving devices should be justified economically by the saving in production time that will result from their use. Cost-effectiveness analysis evaluates products taking into account both economic value and service they provide. The environmental impact of a product over its entire life consists of the energy used in its production, use or operation phase, and end-of-life phase. Life cycle cost (LCC) of a product includes the selling price, running cost, and post-use or recycling cost.
