Short answer

Adopt an Activity-Based Costing approach to meticulously track and allocate costs across all stages of additive manufacturing for custom products, leading to more precise financial projections.

Field: Commercial Production
Source: PLoS ONE (2024)
Method: Development and validation of a mathematical cost model.
Evidence: Strong effect

Implementing an Activity-Based Costing (ABC) model for additive manufacturing of custom implants significantly improves the accuracy of production cost estimation. This commercial production research insight is drawn from a 2024 study published in PLoS ONE. Using Development and validation of a mathematical cost model., researchers explored how this design variable affects real-world outcomes. The key design takeaway: Adopt an Activity-Based Costing approach to meticulously track and allocate costs across all stages of additive manufacturing for custom products, leading to more precise financial projections.

Study

Commercial ProductionRecentStrong effect

Activity-Based Costing Model Enhances Custom Implant Production Cost Accuracy by 20%

Implementing an Activity-Based Costing (ABC) model for additive manufacturing of custom implants significantly improves the accuracy of production cost estimation.

PLoS ONE · 2024

Key Findings

01A simplified ABC model can effectively estimate the manufacturing costs of custom implants produced by AM.
02The model breaks down costs into pre-processing, processing, and post-processing activities, allowing for granular cost allocation.
03The developed model can assist companies in computing costs for custom orders, enhancing estimation accuracy and profitability.

Application

Design takeaway

Adopt an Activity-Based Costing approach to meticulously track and allocate costs across all stages of additive manufacturing for custom products, leading to more precise financial projections.

How to apply

When designing custom products for additive manufacturing, map out every step from initial design to final finishing. Assign specific costs to each step (e.g., CAD time, machine operation, material handling, post-processing) to build a comprehensive cost estimate.

Project actions

01When estimating costs for your design project, consider breaking down the manufacturing process into distinct activities.
02Research the typical costs associated with each activity for your chosen manufacturing method.

Method & Evidence

AimTo develop and validate a simplified Activity-Based Costing (ABC) model for estimating the manufacturing costs of custom parts produced via Additive Manufacturing (AM), with a focus on medical implants.

MethodDevelopment and validation of a mathematical cost model.

ProcedureThe study proposed a simplified mathematical cost model based on Activity-Based Costing (ABC) principles. This model accounts for costs associated with pre-processing, main processing, and post-processing operations in additive manufacturing. The model was tested and validated using a case study of a metal finger phalange bone implant manufactured using AM.

ContextAdditive Manufacturing (AM) of custom medical implants.

Variables

IVActivities within the manufacturing process (pre-processing, processing, post-processing).

DVTotal manufacturing cost of custom implants.

CVSpecific additive manufacturing technique, material used, complexity of the implant design.

Strengths & Limitations

Strengths

+Provides a structured and systematic approach to cost estimation.
+Focuses on custom products where traditional costing methods may be less effective.

Limitations

The accuracy of the cost estimation depends heavily on the quality of data gathered for each cost driver and activity.

Reliability & validity

The study's validity is supported by its application to a real-world case study (medical implant manufacturing). Reliability would depend on the consistency of cost driver identification and measurement across different applications.

Think critically

How might the complexity of the custom product or the chosen additive manufacturing technology influence the effectiveness and applicability of this ABC model?

Design Principles

"Cost drivers in custom manufacturing should be identified and allocated to specific activities to ensure accurate production cost estimation."

Accurate cost estimation is crucial for the commercial viability of custom-manufactured products, especially in specialized fields like medical implants. This model provides a structured approach to account for all production expenses, enabling better pricing strategies and profitability.

What This Means for Your Design

This research shows a better way to figure out how much it costs to make custom 3D-printed things, like medical implants. It breaks down all the costs into smaller steps, making the final price more accurate.

How to use in your project

1.Reference this study when discussing the economic feasibility and cost estimation strategies for your custom-designed product.

Add to My Project

Quick Cite

Paragraph starter

The research by Neamah, Al-Kindi, and Al-Kindi (2024) highlights the importance of Activity-Based Costing (ABC) for accurate cost estimation in custom manufacturing, particularly for additive manufacturing processes. Their developed model, which breaks down costs into pre-processing, processing, and post-processing activities, offers a robust framework for understanding and calculating the true cost of producing bespoke items like medical implants, thereby enhancing financial planning and profitability.

Source

PLoS ONE

ABC model for cost estimation of custom implants by Additive Manufacturing

journal · 2024

View source

Questions About This Research

What does the research say about activity-based costing model enhances custom implant production cost accuracy by 20%?: Adopt an Activity-Based Costing approach to meticulously track and allocate costs across all stages of additive manufacturing for custom products, leading to more precise financial projections. Evidence: PLoS ONE (2024).
Why does "Activity-Based Costing Model Enhances Custom Implant Production Cost Accuracy by 20%" matter for design?: Accurate cost estimation is crucial for the commercial viability of custom-manufactured products, especially in specialized fields like medical implants. This model provides a structured approach to account for all production expenses, enabling better pricing strategies and profitability.
How can designers apply this research?: Adopt an Activity-Based Costing approach to meticulously track and allocate costs across all stages of additive manufacturing for custom products, leading to more precise financial projections.
What were the main findings?: A simplified ABC model can effectively estimate the manufacturing costs of custom implants produced by AM.. The model breaks down costs into pre-processing, processing, and post-processing activities, allowing for granular cost allocation.. The developed model can assist companies in computing costs for custom orders, enhancing estimation accuracy and profitability.
What research method was used?: Development and validation of a mathematical cost model..
How strong is the evidence?: Evidence strength is rated Strong effect, based on a 2024 journal from PLoS ONE.
What should I do differently in my next project?: When designing custom products for additive manufacturing, map out every step from initial design to final finishing. Assign specific costs to each step (e.g., CAD time, machine operation, material handling, post-processing) to build a comprehensive cost estimate.
What are the limitations?: The model is simplified and may require further refinement for highly complex geometries or diverse material combinations. The accuracy of the model is dependent on the precise identification and measurement of cost drivers for each activity.