Life-cycle cost modeling and Optimization for capital equipment procurement

Abstract

Composite airplane manufacturing requires the use of autoclaves to cure composite materials in order to create durable, lightweight parts for use in airplanes. The large size, complexity and utility consumption of this equipment makes it an ideal starting place for cost optimization. Cost modeling and the framework created by this research provide input to understand the cost impact of the complex decision between multiple part capacity and single part capacity autoclaves. The results of this research include the identification of cost drivers for the autoclave equipment as focus areas for future cost reduction efforts. Additionally, wait time modeling illustrates how multiple capacity autoclaves increase work in progress and queue lengths and how to assign costs based on the impact of batching to production flow. The framework and analysis also show cost sensitivity to offloading parts and changes in production rates by using linear optimization algorithms to evaluate different scenarios. The framework is extendable to other capital equipment with complex tradeoffs by serving as a starting point for a data driven understanding of costs from recurring, non-recurring and production flow factors.