Bottom up cost estimation model for project management in semiconductor industry

• Main Author: Cheah, Chin Puay
• Format: Thesis
• Language: English; English
• Published: 2016
• Subjects: T Technology (General)
• Online Access: http://eprints.utem.edu.my/id/eprint/20451/2/Bottom%20up%20cost%20estimation%20model%20for%20project%20management%20in%20semiconductor%20industry.pdf; http://eprints.utem.edu.my/id/eprint/20451/3/Bottom%20up%20cost%20estimation%20model%20for%20project%20management%20in%20semiconductor%20industry.pdf; http://eprints.utem.edu.my/id/eprint/20451/; https://plh.utem.edu.my/cgi-bin/koha/opac-detail.pl?biblionumber=104943

Cost estimation is a process of estimating and forecasting the total cost required of executing the engineering activities from project initiation till project completion. In semiconductor manufacturing industry, project managers encountered several obstacles with regards to cost estimation. There are no proper guidance, no standardization and no project budget breakdown overview on the cost estimation. Consequently, these have incurred no consistency in project cost estimation among project managers, poor cost management and mitigation plan shown by project managers with regards to high percentage difference between the actual and estimate (plan) which is more than 20 percent. Hence, there is a need to develop a systematic framework or a proposed approach for cost estimation in order to help and support the project managers which handling the package assembly project in INN Company, Malacca. This research proposes a methodology that uses bottom up approach via Activity Based Costing (ABC) to estimate a project cost with five key cost elements using Excel-based cost estimator. The package assembly projects that are being discussed and analyzed are projects complexity of I, 2 and 3. The cost model is validated with the historical data while the testing data are validated with the actual data. Mean absolute percentage error (MAPE) is calculated to measure the forecast accuracy. With the full implementation of the established cost model, it helps the company to achieve 7 percent of MAPE in 2015 as compared to 13 percent (2014) and 16 percent (2013). The outcome of the cost model is satisfactory as the MAPE of 7% is obtained as compared to an industrial target of 10%. It is recommended that thorough studies and analysis could be studied to understand greater details of cost element. Web Portal is the recommended tool for the cost estimation in future as it is a collection of web pages that support multiple web browsers.