Economics in Engineering

The consideration of cost plays such an important role in the design decision process that we could easily spend as much time in studying the cost factor as in the study of the entire subject of design. A few general concepts and simple rules are given below.

Standard Sizes

The use of standard or stock sizes is a first principle of cost reduction. An engineer who specifies an AISI 1020 bar of hot-rolled steel 53 mm square has added cost to the product, provided that a bar 50 or 60 mm square, both of which are preferred sizes, would do equally well. The 53-mm size can be obtained by special order or by rolling or machining a 60-mm square, but these approaches add cost to the product. To ensure that standard or preferred sizes are specified, designers must have access to stock lists of the materials they employ. Parts that are made and sold in large quantities usually cost somewhat less than the odd sizes.

Large Tolerances

Among the effects of design specifications on costs, tolerances are perhaps most significant. Tolerances, manufacturing processes, and surface finish are interrelated and influence the producibility of the end product in many ways. Close tolerances may necessitate additional steps in processing and inspection or even render a part completely impractical to produce economically. A plot of cost versus tolerance/machining process is shown in Figure, and illustrates the drastic increase in manufacturing cost as tolerance diminishes with finer machining processing.

Cost versus tolerance/machining process.
(From David G. Ullman, The Mechanical Design Process,3rd ed., McGraw-Hill, New York, 2003.)

Breakeven Points

when two or more design approaches are compared for cost, the choice between the two depends on a set of conditions such as the quantity of production, the speed of the assembly lines, or some other condition. There then occurs a point corresponding to equal cost, which is called the breakeven point. Figure below is a graph of cost versus production by the two production methods, showing the breakeven point.

A breakeven point

Cost Estimates

There are many ways of obtaining relative cost figures so that two or more designs can be roughly compared. A certain amount of judgment may be required in some instances. For example, we can compare the relative value of two automobiles by comparing the dollar cost per pound of weight. Another way to compare the cost of one design with another is simply to count the number of parts. The design having the smaller number of parts is likely to cost less. Many other cost estimators can be used, depending upon the application, such as area, volume, horsepower, torque, capacity, speed, and various performance ratios.