Parametric Cost Modelling for Investment

Casting

Marco Mandolini1(B) , Federico Campi1 , Claudio Favi2 , Paolo Cicconi3 ,

Michele Germani1 , and Roberto Raffaeli4
1 Department of Industrial Engineering and Mathematical Sciences, Università Politecnica delle
Marche, Via Brecce Bianche 12, 60131 Ancona, Italy
[email protected]
2 Department of Engineering and Architecture, Università degli Studi di Parma,
Parco Area delle Scienze 181/A, 43124 Parma, Italy
3 Dipartimento di Ingegneria, Università degli Studi Roma Tre, Via della Vasca Navale 79,
Roma, Italy
4 Department of Sciences and Methods for Engineering, Università degli Studi di Modena e

Reggio Emilia, Via Amendola 2, 42122 Reggio Emilia, Italy

Abstract. This paper presents a parametric cost model for estimating the raw
material cost of components realized employing the investment casting process.
The model is built using sensitivity analysis and regression methods on data gen-
erated by an analytic cost model previously developed and validated by the same
authors. This is the first attempt of developing a parametric cost model for invest-
ment casting based on activity-based costing. The proposed cost model accounts
component volume, material density and material price. The error in estimating
the raw material cost for components whose volume is within the common range
of investment casting is around 11%.

Keywords: Parametric cost modelling · Sensitivity analysis · Investment

casting · Cost estimating relationship · Cost estimation

1 Introduction and Literature Review

The lost wax casting technique is one of the oldest and most advanced of the metallurgical
arts [1]. The precision casting process is capable of producing complex castings with
tight tolerances and good surface finish, and can meet the highest performance standards,
such as those typical of turbojet engines. Other advantages of this process include the
ability to melt materials that are impossible to forge and difficult to process employing
other technologies. Wax casted components have weight ranging from few grams to a
couple of dozens of kg and dimensions ranging from 5 mm to 300 mm. The tolerance
ranges normally achievable in investment cast casting is ±1% of the nominal size, with a
minimum of ±0,10 mm for dimensions lower than 10 mm [2], with a minimum roughness
of 3.2 μm [3].
The manufacturing cost is one of the most important design requirements, for many
kinds of products, which drives most of the technical and technological solutions [4].

© The Author(s) 2021

L. Roucoules et al. (Eds.): JCM 2020, LNME, pp. 386–392, 2021.
https://doi.org/10.1007/978-3-030-70566-4_61
 Parametric Cost Modelling for Investment Casting 387

For casting processes, different analytic cost models have been developed based on the
process’s peculiarities. Several researchers [5–7] have identified the major cost items
of a casting process, such as material, tooling, labour, energy and overheads. The DFM
Concurrent Costing® software developed by Boothroyd Dewhurst Inc. [8] has an analytic
and detailed investment casting cost estimation module aimed at product designers. It
considers most phases of the process (pattern and core manufacturing, pattern and cluster
assembly, cleaning and etching, investment operation, melting, sintering, break out, blast
cleaning and cut off).
However, analytical cost estimation methods and related cost models can be used
only during the embodiment and detailed design phases, when the product is almost
completely defined. For estimating manufacturing cost at the conceptual design phase,
parametric cost models seem more suitable for this aim. The parametric cost estimation
method involves formulating relations between product characteristics and its cost using
available data. The issues of using analytic cost models for estimating the investment
casting process during the design phase is even stronger for investment casting. This
manufacturing process consists of several manufacturing phases and product/process
cost drivers, which are too many for being managed by a design engineer.
Nowadays, industry 4.0, internet of things and data analytic are paradigms that foster
the popularity of parametric cost modelling and cost estimating relationship methods
[9]. Nonetheless, in literature, only few works presenting parametric cost models for
investment casting. Among them, the most significant is that one presented by Creese
[10], which considers the following product drivers: number of surface patches, number
of patterns, volume of the part, floor area, material density and price. The parametric
cost model is built according to historical data and this activity is also called activity-
based costing [11, 12]. However, it is not recognizable any scientific paper presenting a
parametric cost model for investment casting process, based on data got from an analytic
model. This is the novelty of the paper.
Based on a well-established cost estimating relationship approach [9], this paper
presents a parametric cost model for investment casting. The model is built using sensi-
tivity analysis and data regression methods on data generated by an analytic cost model
previously developed and validated by the same authors.

2 Cost Estimation Relationship Building Process

The estimation of the manufacturing cost for wax-casted products generally requires
complex cost estimation relationship, which need various inputs by the designer. Often,
the designer knows this data only at an advanced stage of part design. The purpose
of this section and in general of the study is to obtain a parametric relationship which
allows a cost estimation of the part using data already knows in the early stages of
component design. The cost estimating relationship (CER) is the distinguishing feature
of parametric cost estimation. A CER is a mathematical expression that describes how the
values of, or changes in, a “dependent” variable are partially determined, or “driven,” by
the values of, or changes in, one or more “independent” variables [9]. The CER building
process described later is divided in three parts and it uses the method developed by the
International Society of Parametric Analysts [9].
388 M. Mandolini et al.

2.1 Data Collection

All parametric estimating techniques, including CERs and complex models, need credi-
ble data before they can be used effectively. Parametric techniques require the collection
of historical cost data and the associated non-cost information and factors that describe
and strongly influence those costs (technical non-cost data). Technical non-cost data
describes the physical, performance, and engineering characteristics of a system, sub-
system or individual item. Cost data are obtained using an analytical cost model for
investment casting, developed in a previous work, which is an improvement of that one
proposed by Boothroyd and Dewhurst [8] and taken as reference. The approach for this
improvement consists of four steps, hereunder summarized.
The first step consisted in collecting equations and data, available in Boothroyd and
Dewhurst [8], within an electronic spreadsheet in which investment casting process cost
has been divided in 13 phases: (i) core manufacturing, (ii) pattern manufacturing, (iii)
pattern assembly, (iv) cluster assembly, (v) dissolving core, (vi) cleaning and etching,
(vii) investing pattern cluster, (viii) melt out, (ix) sintering, (x) melting, (xi) break out,
(xii) blast cleaning and (xiii) cut off. The costs of each phase are composed by process
costs (manufacturing, setup and consumables costs) and raw material costs (the costs
related to the casted metal).
The second step consisted in organizing two workshops with foundries to improve
the cost model.
During the third step all the improvements to the investment casting cost model
proposed in DFM have been integrated in the electronic spreadsheet developed at step
1. In this manner, it was possible to draft the cost breakdown for investment casting
and detect the most cost expensive phases: (ii) pattern manufacturing (12 ÷ 20%), (iv)
cluster assembly (11 ÷ 12%), (vii) investing pattern cluster (14 ÷ 15%), (ix) sintering
(~11%) and (x) melting (32 ÷ 39%), which globally represents the 87 ÷ 90% of the
product cost.
In the fourth step the cost model has been evaluated by comparing the costs obtained
with the proposed model and the actual values of around twenty components provided
by the foundries. For all the components it can be noted a deviation lower than 10%.
Starting from the cost breakdown and taking into consideration the most cost expen-
sive phases, cost drivers are the following: batch size; part volume; part thickness; raw
material price; raw material density; labour cost. For each cost driver a reference value
was fixed. These reference values refer to a component of a food packaging machine
(weight: 2 kg, dimensions: 160 × 172 × 15 mm) realized in stainless steel AISI316 and
manufactured in Italy.
For having enough data for the parametric relationship development, each cost driver
indicated above was varied between a maximum and a minimum value and raw material
and process costs derived from the analytical model were collected. This sensitivity
analysis was carried out in two phases: in the first phase (a) only one cost driver at a
time was changed, keeping the others at reference value; instead in the second phase (b)
two cost drivers together were changed. The maximum, minimum and reference values
of each cost driver are indicated in Table 1.
 Parametric Cost Modelling for Investment Casting 389

Table 1. Reference, maximum and minimum values of cost drivers

Cost driver [U.O.M.] Reference value Max value Min value

Batch size [ad] 1000 2000 10
Part volume [m3 ] 0.00026300 0.00063120 0.00001325
Part thickness [mm] 25 50 2
Raw material price [e/kg] 3.4 5.4 0.8
Raw material density [kg/m3 ] 7850 15000 2000
Labour cost [e/hour] 30 70 3

2.2 CER Development

The cost estimating relationship development follows the two-phases analysis indicated
above. With the data obtained in the first phase (a) it is possible to evaluate the relation-
ships among the process/raw material costs and the cost drivers. From this first phase
it can be concluded that volume and density are the only cost drivers that significantly
influence both the cost of the process and the cost of the raw material. The batch size,
part thickness, and labour cost affect only the process cost, while a change in the material
price only affects the raw material cost. This first step lets to understand the cost drivers
to use in the second step to obtain parametric cost relationships. In this study, the focus is
about the cost of raw material, which relationship with raw material price, part volume,
and density is shown in Fig. 1. For this figure it is possible to observe that raw material
cost linearly depends on its unitary price (the higher the unitary price the higher the cost).
Raw material cost is related to part volume and density via a step function because, while
increasing the weight, pouring and handling systems may change discontinuously.
To build a parametric relationship function of these three cost drivers, it was firstly
calculated 26 linear least square regressions (one for each discrete levels of raw material
price) between raw material cost, the dependent variable, and part volume, the inde-
pendent variables. For each regression it was obtained 2 coefficients: the slope and the
intercept. Two other linear least square regressions were subsequently made between the
obtained coefficients, in this case the dependent variable, and the discrete raw material
price levels, the independent variable. By combining the data of the two regressions,
a parametric parabolic equation was obtained (1). To develop the previous equation,
material density was fixed to the reference value (ρ = 7850 kg/m3 ), allowing the raw
material cost calculation only for part which have the same material density of reference
value.

raw material cost (ρ = 7850) = 23760.18 · (part volume) · (raw material price)
(1)
−2056.62 · (part volume) + 0.96 · (raw material price) − 0.12

Therefore, in order to account the effects of using different materials (e.g. melting
temperature, gate volume, etc.) on the raw material cost, a density factor coefficient
(f ρ ) it was introduced. Its value varies in function of material density and is equal to
1 for the reference material (AISI 316), less than 1 for materials with a density lower
390 M. Mandolini et al.

than the reference (0.31 for Aluminium 1100; 0.98 for G 1800 Gy cast iron; 0.99 for
42CrMo4), greater than 1 for material whit a density higher than the reference (1,01 for
39NiCrMo4). Then the cost of raw material can be calculated by Eq. (2).
raw material cost = fρ · raw material cost (ρ = 7850) (2)

Fig. 1. Sensitivity analysis of raw material density, price and part volume on raw material cost.

2.3 Validation
The cost estimating relationship must produce, to a given level of confidence, results
within an acceptable range of accuracy. The validation of the previous relationship
was carried out comparing its results with those deriving from analytical cost model
of investment casting. Table 2 presents the absolute cost deviation between estimated
values and the data obtained using the analytical model.

Table 2. Comparison between analytical model (reference) and parametric model (calculated)

Component Material Reference cost Calculated cost Absolute deviation

1 Aluminium 1100 e 3.77 e 4.40 17%
2 G 1800 grey cast e 2.53 e 2.44 4%
iron
3 42CrMo4 e 5.85 e 6.48 11%
4 39NiCrMo4 e 8.29 e 9.44 14%
5 AISI 316 e 20.03 e 23.77 19%
Average absolute deviation 11%

Results show a low deviation between the raw material cost estimated using the
parametric model and the data obtained using the analytical model (the average abso-
lute deviation is approx. 11%). This result demonstrates the goodness of the proposed
parametric model.
 Parametric Cost Modelling for Investment Casting 391

3 Conclusions
This paper presented a parametric cost model for investment casting, developed accord-
ing to the method presented in the parametric estimating handbook. The elementary data
used for developing the cost model was obtained from an analytic cost model developed
in a previous work and validated with the cooperation of two foundries. By employ-
ing sensitivity analysis and regressions methods, the paper presented a parametric cost
model for estimating the raw material cost of wax casted parts. The error in estimating
the raw material cost for components whose volume is within the common range of
investment casting is around 11%.
Future research, following the method used in this work, should aim to develop
parametric cost models for the estimating variable (i.e.: consumable, process and setup)
and fixed costs (i.e. tooling cost).

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