Light Duty Technology Cost Analysis, Power - US Environmental ...

part, while “buy” indicates an established price based on historical data is used in place of
a full quote work-up. Parts identified as a “buy” are treated as a purchased part.
Many of the parts considered to be purchased are simple standard fasteners (nuts, bolts,
screws, washers, clips, hose clamps) and seals (gaskets, o-rings). However, in certain
cases, more value-added components are considered purchased when sufficient data
existed supporting their cost as a commodity: that is, where competitive or other forces
drive these costs to levels on the order of those expected had these parts been analyzed as
“make” parts.
In the MAQS worksheet, standard purchase parts costs are binned to material costs,
which, in the scope of this analysis, are generally understood to be raw material costs. If
the purchase part content for a particular assembly or system is high in dollar value, the
calculated cost breakdown in the relevant elements (i.e., material, labor, manufacturing
overhead, mark-up) tended to be misleading. That is the material content would show
artificially inflated because of the high dollar value of purchase part content.
To try and minimize this cost binning error, purchase parts with a value in the range of
$10 to $15, or greater, were broken into the standard cost elements using cost element
ratios developed for surrogate type parts. For example, assume a detailed cost analysis is
conducted on a linear inductive position sensor, “Sensor A.” The ratio of material, labor,
manufacturing overhead, and mark-up, as a percent of the selling price, can easily be
calculated. Knowing the commodity selling price for a similar type of inductive sensor,
“Sensor B,” along with the cost element ratios developed for Sensor A, estimates can be
made on the material, labor, manufacturing overhead, and mark-up costs for Sensor B.
Purchased part costs are obtained from a variety of sources. These include FEV and
Munro team members’ cost knowledge, surrogate component costing databases, Tier 1
supplier networks, published information, and service part cost information. Although an
important component of the overall costing methodology, purchase part costs are used
judiciously and conservatively, primarily for mature commodity parts.
C.4.3 Labor Database
C.4.3.1 Overview
The Labor Database contains all the standard occupations and associated labor rates
required to manufacture automotive parts and vehicles. All labor rates referenced
throughout the cost analysis are referenced from the established Labor Database.
Hourly wage rate data used throughout the study, with exception of fringe and wage
projection parameters, is acquired from the Bureau of Labor Statistics (BLS). For the
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