The Costing Engine methodology

The QuoteArchitect costing engine is based on the “Activity Based Costing” model (ABC), a well-known methodology. In the Virtual Factory model, all costs, fixed and variable, direct and indirect, are used to automatically calculate the hourly rates of operations, direct labour and supporting departments. All overheads are proportionally allocated to the defined hourly rates.

The operations definition

The other element in the QA virtual factory model, in addition to the cost elements, is the definition of the production elements, the “operations”. Both in-line, as well as stand-alone activities, these are called operations, each consisting of one or more processes.

The operation definitions are based on operation type, technology, line occupancy, operator involvement and batch size. The processes are defined for annual costs, operational time elements and process configuration. Together they create the dynamic, rules-driven calculation models for every thinkable manufacturing operation. The intelligent configuration support system assists in the definition and fine-tuning of the operations.

The operations definition results in the exact operation hourly rates, the unused capacity costs and all the background checks for product, shape code and process limitations, including component PSL level verifications, feeder allocation limitations or missing tape feeders for a new shape.

The concept of “bottleneck time definition” is used in the operations time calculations to calculate accurate production times.