Title: Cost models for evaluating industrial investments
Author: Ernesto Newbery, Manuel A. Carrillo, Tarek M. Khalil
Independent consultant; recently retired as Industrial Engineer (University of Buenos Aires); Chief of the Industry Section, Inter-American Development Bank, Washington, DC, USA.
BS and MS Industrial Engineering (University of Miami); Bell Laboratories, Piscataway, New Jersey, USA.
Chairman, Department of Industrial Engineering, University of Miami, Coral Gables, Florida, USA
Abstract: Production cost structures within any manufacturing system vary from one branch of industry to another, and from one country to another. This is based on a number of factors including cost and availability of natural resources, know-how and technology. It would be useful to analyse the whole spectrum of industry to provide benchmark indices pertaining to the cost structure of each of these industries. These indices in the form of elemental cost ratios to total sales, can be helpful in comparing the behaviour of different types of industry within a country and across countries. Such an approach would open the opportunity for the development of a standard methodology that can be used as a guide for industrial development, introducing new technologies and/or expanding operations internationally. This paper makes an attempt in that direction by developing a computerized model utilizing US industries' data as a basis.
Keywords: production costs; operating costs; manufacturing costs; cost modelling; cost components; materials costs; labour costs; administration costs; selling costs; industrial investments.
Int. J. of Technology Management, 1988 Vol.3, No.6, pp.711 - 719
Available online: 26 May 2009