Cost Assessment in Ship Production

The top-down approach determines the production cost from global parameters such as the weight of the hull, the block coefficient, the ship length etc., Schneekluth and Bertram (1998), Carreyette (1977). The relations between cost and global parameters are found by evaluation of previous ships. Thus, the top-down approach is only applicable if the new design is similar to these previous ships. Also, the cost estimation factors in the approach reflect past practice and experience. Despite its popularity and frequent references in the literature, top-down approaches have serious disadvantages, which are often overlooked or concealed: − The approach uses only global information and is thus incapable of reflecting local form changes or details of the design improving producibility. − The approach is usually based on weight. Any change, which increases weight, will automatically increase the cost estimate regardless of the real effect on cost. Extreme lightweight designs may drastically increase the number of required hours, while large frame spacing may increase weight, but decrease necessary man-hours. This is often not reflected in the formulae! − The approach is based on historical data, i.e. historical designs and historical production methods. In view of the sometimes revolutionary changes in production technology over the last decade, the data and formulae may sometimes be called 'prehistoric'. They do not reflect new approaches in structural design or production technology. − The approaches were probably based on inaccurate data even at the time they were derived. Shipyards are traditionally poor sources of cost information. The data are frequently skewed reflecting pressures of the first-line managers and other factors. − Not suitable for structure optimization as there is no link between the cost and the design variables (scantlings). • Bottom-Up (micro, cost-up or engineering analysis) approaches (direct rational assessment)