Estimating Cost & Improving Trade-off between Performance and Cost at the Early Design Stages

Typically 70% to 80% of a product's cost is said to have been committed by the end of the conceptual design stage [1]. Because of the importance of the conceptual stage, cost estimation should be carried out as accurately as possible to provide valuable information to product designers. Despite this level of built in costs at the conceptual stage of design, having useful cost estimates at this stage is very difficult, due to the limited availability of data, especially for new products when product specifications are expressed as a range of values. The main aim of the research presented in this paper is to use the Taguchi method of Design of Experiments in order to use the sparse and available conceptual information more effectively to estimate the cost of a product. A review of the literature about cost estimation techniques and the available information at the conceptual stage of design is presented. A case study is also presented and used to illustrate how the Taguchi method of Design of Experiments is applied in order to assist designers at the conceptual design stage to reduce uncertainty of cost estimates and to carry out a more informed trade-off between performance and cost.