Dynamics of Cost Uncertainty for Innovative High Value Manufacturing Products - A Geometric Phenomenon

Oliver Schwabe, Essam Shehab, John A. Erkoyuncu

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

In practice the forecasting of cost uncertainty for high value manufacturing products is typically a statistical exercise focused on predicting a static cost range at a future point in time. This only leads to robust forecasts if sufficient historical data is available, robust knowledge of cost estimating relationships exists and these relationships do not change in the time between creating the forecast and verifying its accuracy. The more innovative the product is the less likely it however is that these prerequisites are met. Using cost data from the U.K. Ministry of Defence Royal Air Force A400M transport aircraft from 2002 to 2014 as an example, the dynamics of cost estimating relationships over time are examined using a novel non-statistical forecasting approach. The approach considers cost uncertainty as a geometric phenomenon, does not rely on prior information and permits easy identification of patterns in changes of cost estimating relationships over time.

Original languageEnglish
Title of host publication6th CIRP Global Web Conference, CIRPe 2018
Subtitle of host publicationEnvisaging the Future Manufacturing, Design, Technologies and Systems in Innovation Era
EditorsAlessandro Simeone, Paolo C. Priarone
PublisherElsevier B.V.
Pages225-230
Number of pages6
Volume78
ISBN (Electronic)9781510875692
DOIs
Publication statusPublished - Jan 1 2018
Externally publishedYes
Event6th CIRP Global Web Conference, CIRPe 2018 -
Duration: Oct 23 2018Oct 25 2018

Conference

Conference6th CIRP Global Web Conference, CIRPe 2018
Period10/23/1810/25/18

Keywords

  • Cost Uncertainty
  • Dynamic Space
  • Geometric Forecasting

ASJC Scopus subject areas

  • Control and Systems Engineering
  • Industrial and Manufacturing Engineering

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  • Cite this

    Schwabe, O., Shehab, E., & Erkoyuncu, J. A. (2018). Dynamics of Cost Uncertainty for Innovative High Value Manufacturing Products - A Geometric Phenomenon. In A. Simeone, & P. C. Priarone (Eds.), 6th CIRP Global Web Conference, CIRPe 2018: Envisaging the Future Manufacturing, Design, Technologies and Systems in Innovation Era (Vol. 78, pp. 225-230). Elsevier B.V.. https://doi.org/10.1016/j.procir.2018.08.320