by Peter Stanley
| September 26, 2014
One of the complications in generating Bids and Proposals for Modules and Microcircuits is determining the “Should Cost” for better cost realism.
Most of the electronic modules and their components in the proposals are not actually manufactured by the Proposer, but rather by a subcontractor, thus becoming a Purchased item.
It is difficult to determine the cost of making the Module, and determining a fair cost.
Costs for the modules include Assembly and Test costs together with the component costs.
Components such as ASIC’s (Application Specific Integrated Circuits), have both the cost of developing the devices and the cost of producing them.
The cost of developing an ASIC can reach hundreds of thousands of dollars, depending on the complexity. When an ASIC is used on a module, the average unit cost is typically the development cost plus the production cost divided by the quantity.
TruePlanning has the capability of estimating the development and production cost for an ASIC (along with similar electronic devices, such as FPGA’s and other components).
Below is a sample of the outputs of TruePlanning ASIC costs.
Once a user has determined the cost of the most expensive components, they further need to estimate the cost of making the actual Module circuit card, assembling the components, testing the module and any other costs
Again, TruePlanning has the capability of estimating the development and production of a Module complete with the capability to add the module components as children of the estimate, providing a complete Module cost.
Below is a sample of the outputs of TruePlanning Module costs.
MCM (MultiChip Modules) may also be estimated by adding Modules as children of Modules.
Minor common Modules may also be depicted as purchased components, with their details being used to accumulate the Assembly and Test costs of the parent Module.
Modules may also be added to regular hardware cost objects to accumulate costs for a complete Hardware estimate.
So, when challenged to perform estimates for the many decisions to be made during the business development process, including price-to-win (PTW), ghosting the competition, make/buy decisions, and bottoms-up bid validation, the cost estimation models like the new PRICE Microcircuit models prove invaluable.