Manufacturing cost analysis: a generic methodology
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The study undertaken at Siemens & Furnas Controls (SFC), located in Batavia, Illinois will be used to help determine profitability and viability of its oldest existing department or line of products. The department houses eight work cells that produce 232 variations of eight representative styles or models of electromechanical devices or switches. Production will be relocated to the SFC Osceola, Iowa facility. Manufacturing cost analysis is required for relocation planning purposes and to provide current verified data regarding profitability of the line. The business team handling the transition to Osceola simply wants to verify the department profit margin from the labor rates, costs, and time standards of the various switches before the planned move. The decision to keep, modify, or discontinue all or some of the line of products will be, in part, based on the findings of this study. Due to the time constraints of the study, an algorithm was developed to enable the project to be completed in an optimal time frame by analysts other than its designers.