| The need for outsourcing in today's vertically “de-integrated” electronics industry and the continuous pressures on the product chain to reduce time-to-market, shrink product cycle time, decrease prices and narrow profit margins have put contract manufacturers in a position where price quoting activities are becoming dramatically important. Many large contract manufacturers who specialize in highly standardized, low profit margin electronics products are very sensitive to these pressures. Thus, at the assembly and test level of the printed circuit board life cycle, contract manufacturers need to clearly estimate each and every economic input used for the production of printed circuit board assembly jobs.{09}Moreover, they need to analyze the effects of input variables on the final price quote due to potential variations on the estimates and to find the most critical input variables.; This research has established a methodology to cost and price accurately large volume production jobs in on going organizations by using engineering economy and detailed cost estimation on the basis of fully allocated costs and long run capacity usage. The methodology backwardly calculates a minimum factory door price by setting the net present value of the job to zero. This minimum factory door price allows the revenues of the job to pay for all costs, recover all related program investments costs, and obtain a return equal to the minimum attractive rate of return (MARR).; The framework has been applied to printed circuit board assembly, and takes into account some current trends in the outsourcing business, especially the build-to-order business model and bonded inventory system being used by many Original Equipment Manufacturers. The methodology could be generalized to other industries and industry applications.; A case example related to printed circuit board assembly, that shows the applicability of two engineering economy based detailed cost estimation models and a sensitivity analysis framework is incorporated into this research. |
