Value-based Estimate Cost At Completion Model Applying Multi-Attribute Utility Theory

Paradigm shift to market driven costing and pricing at early product design stage, whilst examining customer's affordability is gaining importance. Design and manufacturing engineers along with Cost analyst concurrently now focus on product acquisition cost early to decide on affordable design and cost examining customer technical requirements and manufacturers product-process capability, resulting to Estimates At Completion (EAC) unit product cost. At this stage, best trade-off design is compromised considering number of conflicting criteria. The Pareto set technique is explained and it is illustrated how to approximate sets of best compromise solutions. Importance of affordable computed EAC and its purpose to provide informed decision making on margin optimisation actions are explained. Applying design-based estimating method, customer and manufacturer design parameters utility cost values are computed and they are then applied to develop an EAC cost model for a domain specific aircraft component; the Inlet Cowl. Formulas developed for the model are validated through a case study. This method proposed is different in comparison with any conventional method of cost modelling.