A Cost Engineering Method For Product-Service Systems Using System Cost Uncertainty Analysis

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Main body incorporating the understanding of the field of cost engineering and the contribution of the selected research.

Critically reviews the relevance of the research to the field of cost engineering by deeply analysing the research and stating the contribution

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This research work focuses on a Cost Engineering Method for Product-Service Systems (PSS) which is based on a System Cost Uncertainty Analysis (SCUA).In this case, the System Cost Uncertainty Analysis is a method of probability that is focused on the determination of the total costs of operation of PSS system. The research paper aims at introducing or proposing a PSS cost engineering techniques that is able to reduce the aleatory uncertainty involved in the processes of determining costs by use of PSS thereby proving some sort of certainty in the process of cost-capacity analysis which is the main functioning of PSS. The introduction of the probabilistic methods generally based on previous research by (Estrada and Romero, 2016).

According to Estrada & Romero (2016), a  PSS  can  be described  as a  “system  of  systems  consisting  of  a  system  product  and a set of system services, which are jointly capable of fulfilling a specific customer demand”. Also, the newly emerging trends for cost estimations by use of PSS are built on four main techniques which include;

1. Cost estimation by analogy
2. Activity-based costing,

• Parametric method

1. Extrapolation

Objectives

This research paper has a main aim of providing or improving certainty in the relationship between cost and capacity in every PSS that is being offered for use in cost engineering. It also aims to use the research method and ontology in order to completely mitigate the aspects of uncertainty which for this case include the aleatory and epistemic.

Methodology

It is first important to understand that a series of methods are normally applied so as to reduce the uncertainties in cost estimations in engineering projects. Also, the process of selecting the method for use during a PSS method of cost estimation mainly depends on whether the various required data is available or not. However, estimation is the most widely used method and this therefore means that a real cost engineering must be carried out (as proposed), for the reduction of uncertainty when using PSS for costing.

In this research paper, the proposed method for cost engineering is the use of a PSS Ontology. According to Estrada and Romero (2016), the PSS ontology simply revolves around the functioning of the System   Quality Attributes (SQA) which measures the PSS’s functionality which consequently gives the basis for the calculation of operational costs. The main reason for using this PSS-SQA in this research is to cut or mitigate the epistemic uncertainty that exists in the PSS behaviour descriptions.

PSS Cost Engineering and Probabilistic Method

Probabilistic Method of PSS Cost Engineering

To achieve the objectives of this research paper through the proposed methodology (PSS-SQA), some of the fundamental questions were to be answered by employing the proposed method include:

1. What a PSS can do, that is, what are its capabilities?
2. How well does a PSS perform, that is, how is its performance capacity?

System Engineering as a course exacerbates the required logical and engineering endeavors so as to create, deliver and maintain frameworks. The cost estimation of any future framework is one of the key aspect to accomplish an effective plan. The PSS engineering group should do a Cost Uncertainty Analysis in which the costs effects of vulnerabilities or uncertainties related with framework's specialized definition and cost estimation techniques are evaluated (Garvey et al., 2016).

The graphical representation of  PSS-SQA Ontology is as shown in figure 1 and the relationship between the  PSS-SQA Ontology and the  following PSS cost engineering method based on the research by Estrada and Romero (2016),  is as shown  in Figure  4.

Generally, the proposed probabilistic model was based on the total costs coming from the total PSS operational costs. The system is composed of various subsystems and the consequent systems of subsystems. Each cost of a subsystems can be taken as a random variable and is a function of another random variable of functional performance, for the PSS of the given subsystem.

Therefore, (the relationship of the functional performance of the subsystems to their given costs). After the cost uncertainty of all the subsystems have been considered, the PSS System of Systems Costs are defined and are represented in the  random  variable Total PSS Operational Cost  which is expressed as;

CPSS a questionable amount with a scope of conceivable qualities.

A helpful incentive to decide is its desire that is, the mean, which is the whole of all its conceivable qualities weighted by the probabilities related with these qualities. As per the Strong Law of Large Numbers for adequately substantial number of test redundancies, it is basically sure that the normal of the observed estimations of the irregular variable be roughly equivalent to the normal value (Garvey et al., 2016).Nevertheless, since the trial in this specific case is the assurance of the Total PSS Operational Cost, it's anything but a repeatable occasion. It isn't considered as a repeatable occasion since each PSS is customized/built for a specific client.

In addition, the Total PSS Operational Cost considers the aggregate interim time as the authoritative time; at the end of the day, the computed cost is the aggregate expense for the PSS task along the conceptual period. The PSS task along the authoritative timeframe alludes to the utilization phase of the PSS lifecycle.

Results and Findings

Results Findings

During the tests, products and services were configured with a PSS was carried out where the system was composed of product and service systems. The product system having three subsystems and service system having two subsystems as shown in the figure 3.

PSS Configuration

Using lmogorov-Smirnov and Chi-Square tests the distribution based on best fit was found and data of functional performance tabulated as shown in figure 4.

Functional Relationships and Distributions

The expected Total PSS Operational Cost then determined as;

Generally, the research shows that regardless of PSS’s type and quantity of configuration the PSS cost engineering method will always provide a way of operational cost determination, also, there is no restrictions to the number of subsystems that can be used.

Part B: Relevance, Applicability and Critical Evaluation

The Relevance

The relevance of PSS cost engineering methods that has been applied in this paper can be looked in many different ways ranging from the manufacturing industry, service delivery and the general engineering construction activities. Mainly, this PSS cost engineering provides an efficient way of determining the costs of operations every PSS subsystem that may be needed by means of their functional performance without considering the configurations of the PSS such as the quantity and type of products, service quantities and types. This therefore means that this PSS cost engineering method is very universal as it incorporates everything ranging from product, use and the results.

It evident that various manufacturing industries and organizations in the world are trying to find ways of withstanding competitions while enhancing profitability of their businesses over longer periods of years. This is only possible by improving services offered which also depend on the equipment employed in the process of service delivery which can consequently result into servitization. Servitization is the move of various industries from providing products into service solutions.

The use of PSS in cost engineering has a great value in the evaluation of costs and service offering during the servitiation process. In comparison to the traditional form of adding value, which was driven by the production process, today, competitive advantage derives from value provided through service use/function. Within the PSS research domain, initial interest centered on potential improvements in sustainability, which encapsulates economic, environmental and social aspect.

With the utilization of PSS cost engineering evaluation of activities, changing the product–service blend encourages an expansion in eco-proficiency, which changes the present value-based economy, to an objective orientated practical economy. The adjusted idea of item and administration offers better correspondence between the customer and the provider. This results in enhanced sustainability, where wastage of materials and vitality is minimized.

Relevance, Applicability, and Critical Evaluation

At long last, this PSS cost engineering technique does not present limitations on the quantity of item subsystems or administration subsystems, subsystems satisfactory in capacity of the PSS plot. Be that as it may, while considering a PSS commercialization under an outcome situated plan, exceptional consideration must be paid to the useful execution distribution interims keeping in mind the end goal to agree to client prerequisites. The PSS cost engineering strategy decides the expense by given estimations of execution, and these qualities ought to be more serious than in different plans.

This research paper considers PSS as a framework which incorporates physical protests and administration units. These components must be organized with some sort of connections that arrange the framework effectively. This association accept that the PSS is never again restricted to a physical item; however to capacities, utilization and results got from the usage of a more extensive framework, including administration units, physical items, and also the hierarchical connections between them. This leads us into identification of three main elements of a PSS in line for use in cost engineering methods. The elements include the physical objects, the service unit and the links used to correctly coordinate the offer i.e. organization of the system.

The physical items inferred in the framework are tangible things which give diverse specialized capacities. For instance, in the structure of a PSS for Bicycle Sharing as an item, the bike is a physical protest in the framework. For the most part, when alluding to an item alone, the offer of the physical item happens and the client at that point fulfills his needs through proprietorship and aggregate control of the utilization of the item. A physical item, as a component in the PSS offer, adds to the achievement of a usefulness that takes an interest in a bigger framework giving a service to the client.

The service units are components created by planners and acquainted in the PSS with encourage the co-generation with clients, of significant worth being used of the physical articles. The service units can likewise give extra help capacities to the clients or to the association of the framework. The capacities can be specialized, for instance repairing a physical question in the framework, yet can likewise give help to the clients, as for instance; preparing for better utilization of the framework. Inside the system of the PSS for instance Bicycle Sharing as an item, a case of a service unit is the reservation unit, a geographically stationed specifically at the bikes stations. The reason for this unit, in connection with the client; is to furnish them with the physical object.

Likewise in this paper, the presented probabilistic strategy depends on a System Cost Uncertainty Analysis, and proposes the utilization of functional execution as a random variable, for both the portrayal of PSS subsystems interconnections, and the PSS subsystems cost assurance. Since a standout amongst the most imperative output of the technique is the Total PSS Operational Cost dissemination, different utilizations of the strategy may include, hazard management and framework simplifications.

All through the building development industry, the present price estimating framework in development never again addresses the issues of the needs pertaining to participants of development and construction industry including fundamentally the requirements of the state as the primary member in the effective spending venture. Subsequently the need of a productive PSS is required to guarantee that necessities are met completely by giving basic changes in ways to deal with the entire arrangement of development and administration of construction costs.

Using this strategy for PSS cost engineering, forming the methodological premise of expert construction administration has been made conceivable in light of another bearing in the improvement of the construction valuing through the advancement of cost administration framework in development ; coordinating the appraisal of speculation costs, assessed estimating, contract estimating, assessment of the real development costs .This implies dangers associated with development ventures can be deliberately assessed before settling on choices on ventures.

On framework simplification, the territory of viable utilization of PSS cost engineering system isn't restricted to self-controlled proficient associations and partnerships.

Additionally, the national and metropolitan direction of evaluating at last seeks after indistinguishable objectives from companies, there is making of a solitary arrangement of development, administration and control of construction costs and along these lines the PSS cost engineering eases the work or frameworks for such companies. Subsequently, the idea of cost building is attractive to be adjusted and shape the premise in the improvement of the construction estimating control frameworks at national, territorial and civil levels.

Generally, the PSS cost engineering method under this study conveys early consciousness of expenses related with designing choices and dangers as an undertaking initially gets in progress. Cost Engineering bolsters the refinement of the evaluations as the specialized standard gets more solidified and the modern groups are framed.

Most importantly, in line with the current need for sustainability in development, PSS provides a greater advantage to the environmental preservation. Through PSS products can be tailored to have very long life cycles. Apart from advantages on the economic perspective to the user, there are fewer negative sustainability implications. For example the production of light bulbs with longer life cycles or lifespans greatly reduces their rate of disposal thus saving on the environment.

Application Example

A case of application of this research on the PSS cost engineering method is an abstract configuration of a PSS, in which the product-system is compounded by three subsystems, and the service-systemic conformed by two subsystems.

The expected Total PSS Operational Cost then determined as;

Also looking in a case of  a  photocopier, in the event that it is commercialized under the item situated plan, the PSS cost engineering technique will be expected to characterize the service subsystems costs for instance item establishment, preparing, upkeep and repairs .Also, if the photocopier PSS offering can be marketed under an utilization arranged plan the PSS cost engineering strategy must incorporate other item subsystems, for example, sensors that screen the execution of the item and afterward build up the aggregate PSS Operational Cost equations and the resulting estimations to locate the expected Cpss.

Improvement of PSS Cost Engineering Estimation Method

Additionally work must be done with a specific end goal to propose strategies to decide on less complex numerical articulation or equations that portrays how cost is identified with the useful execution of the subsystem.

The PSS structure can be a piece of an examination work where Total PSS Operational Cost random variable ought to be set inside a bivariate irregular vector with PSS functionality as the other random variable. Together the expense and the usefulness of the PSS are utilized to get a Joint Probability Model. The primary motivation behind this methodology will help break down the PSS cost conduct by the given learning of its functionality (Estrada and Romero, 2016).

Additionally, different structure ought to be created for supporting the execution of settled classes of PSS plans of action, that is, item oriented, utility oriented, and result-oriented plans of action. Every plan of action class connected to five operational-level strategies that guarantee the model can be actualized effectively and in this manner creating value. Such strategic sets that ought to be put into contemplations incorporate; contracts; showcasing; systems; item and administration outline and maintainability operational practices.

References

Estrada, A., & Romero, D. (2016). Towards a Cost Engineering Method for Product-Service Systems based on a System Cost Uncertainty Analysis. Procedia CIRP, 47, 84-89.

Garvey, P. R., Book, S. A., & Covert, R. P. (2016). Probability methods for cost uncertainty analysis: A systems engineering perspective. Chapman and Hall/CRC.