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Development of a Cost Estimation Model in a Furniture Manufacturer

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Flexible Automation and Intelligent Manufacturing: Establishing Bridges for More Sustainable Manufacturing Systems (FAIM 2023)

Part of the book series: Lecture Notes in Mechanical Engineering ((LNME))

Abstract

This work was developed to improve the costing process of new products within the Product Development Department of a furniture manufacturer. It consisted of creating a parametric cost estimation model based on applying simple and multiple linear regressions, considering the existing data of the products produced and their respective costs. The proposed model considers the cost estimation of creating a product that covers the materials and operations costs. The suitability of the different independent variables was studied by applying simple and multiple linear regressions. A set of functions that return an estimate of the cost as a function of these predictor variables was obtained. The model built with the functions obtained provides the materials and operations cost estimation. The results indicated that 75% of the tests performed show an estimation error of less than 2% in the total cost of a product. Incorporating this model in a tool with the purpose of cost estimation brings the ability to predict prices faster, improving the internal process of obtaining costing and enhancing the analytical capacity of the team in the relentless pursuit of cost minimization and value creation.

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Acknowledgments

The authors acknowledge Fundação para a Ciência e a Tecnologia (FCT) for its financial support – UIDB/50022/2020 (LAETA Base Funding).

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Authors and Affiliations

  1. ISEP – School of Engineering, Polytechnic of Porto, Rua Dr. António Bernardino de Almeida, 431, 4249-015, Porto, Portugal

    Francico Reis, António Amaral, Marisa Oliveira & M. Teresa Pereira

  2. INEGI – Institute of Science and Innovation in Mechanical and Industrial Engineering, Rua Dr. Roberto Frias, 400, 4200-465, Porto, Portugal

    Marisa Oliveira & M. Teresa Pereira

  3. INESC TEC – Institute for Systems and Computer Engineering, Technology, and Science, Porto, Portugal

    António Amaral

  4. School of Hospitality and Tourism of Polytechnic Institute of Porto, Applied Management Research Unit (UNIAG), Rua D. Sancho I, 981, 4480-876, Vila Do Conde, Portugal

    Fernanda A. Ferreira

Authors
  1. Francico Reis
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  2. António Amaral
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  3. Marisa Oliveira
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  4. Fernanda A. Ferreira
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  5. M. Teresa Pereira
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Corresponding author

Correspondence to Marisa Oliveira .

Editor information

Editors and Affiliations

  1. Department of Mechanical Engineering, ISEP – School of Engineering, Polytechnic of Porto, Porto, Portugal

    Francisco J. G. Silva

  2. Department of Mechanical Engineering, ISEP – School of Engineering, Polytechnic of Porto, Porto, Portugal

    Luís Pinto Ferreira

  3. Department of Mechanical Engineering, ISEP – School of Engineering, Polytechnic of Porto, Porto, Portugal

    José Carlos Sá

  4. Department of Mechanical Engineering, ISEP – School of Engineering, Polytechnic of Porto, Porto, Portugal

    Maria Teresa Pereira

  5. Department of Mathematics, ISEP – School of Engineering, Polytechnic of Porto, Porto, Portugal

    Carla M. A. Pinto

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Reis, F., Amaral, A., Oliveira, M., Ferreira, F.A., Pereira, M.T. (2024). Development of a Cost Estimation Model in a Furniture Manufacturer. In: Silva, F.J.G., Ferreira, L.P., Sá, J.C., Pereira, M.T., Pinto, C.M.A. (eds) Flexible Automation and Intelligent Manufacturing: Establishing Bridges for More Sustainable Manufacturing Systems. FAIM 2023. Lecture Notes in Mechanical Engineering. Springer, Cham. https://doi.org/10.1007/978-3-031-38165-2_28

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  • DOI: https://doi.org/10.1007/978-3-031-38165-2_28

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-031-38164-5

  • Online ISBN: 978-3-031-38165-2

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