Proposed Model for Predicting The Cost of Direct Material Items Based on Design Variables Field Study: Al-Noman PVC Pipe Factory
DOI:
https://doi.org/10.31272/jae.i145.1285Keywords:
Proposed Forecasting Model, Direct Materials Cost, Design VariablesAbstract
The research aims to analyse the impact of design variables on the direct material cost in the plastic pipe manufacturing industry, a key material in construction industries. The study focuses on presenting a model to predict the cost of this component, as accurate forecasting is essential for manufacturing companies to control costs, improve resource allocation, and achieve profitability. Since direct materials constitute the majority of production costs, traditional cost estimation methods often rely on historical data, which cannot account for the influence of design choices on material costs. This research introduces a model based on design variables to determine direct material costs, emphasising the mechanical specifications of the pipes used. The model allows for the application of target costing techniques, enabling its use in the early design stages to determine precise material quantities and make informed design decisions. The study utilised real-world data from the manufacturing environment. It reached several vital conclusions, the most important of which is that engineering and material design variables significantly impact direct material costs and overall production. Engineering variables are associated with the product's functional aspects, while material variables relate to the product's appearance and structure. Based on these findings, the research recommends the need for coordination between engineering and material design teams to balance product functionality and direct material costs, providing a better understanding of the impact of these variables on production costs.
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