Annual Indirect Overhead

Annual indirect overhead costs fall into two categories:

Indirect Overhead Cost = Support Services Cost +
Facilities Cost

These categories are discussed in the following sections:

Facilities cost is included in indirect overhead cost by default, but Digital Factory Administrators can override the default and specify that such costs are to be counted as part of direct overhead by setting the Digital Factory variable Add Facility Cost to Direct Overhead to true.

Facilities Cost

The Facility budget accounts for the annual costs associated the factory as a whole, including rent, insurance and utility costs (excluding the costs to run the machines).

All these costs depend on work center footprint, which includes the machine footprint plus extra area around the machine (for example for safety, gas lines, and so forth). Rent depends on work center footprint increased by a non-production-area factor, in order to account for non-production space such as hallways and front offices.

Facilities cost is calculated with the following formulas:

Facilities Cost = Annual Rent + Insurance + Utilities

  • Annual Rent = Work Center Footprint * (1 + Nonproduction Footprint Factor) * Annual Cost Per Square Foot
    • Work Center Footprint = Machine Length * Machine Width * Allowance Factor
      • Machine length (specified by the machine property Machine Length)
      • Machine width (specified by the machine property Machine Width)
      • Allowance factor (specified by the machine property Allowance Factor For Machine Footprint)
  • Insurance = Annual Rent * (Fire Factor + Loss Factor + Liability Factor)
    • Annual Rent = Work Center Footprint * (1 + Nonproduction Footprint Factor) * Annual Cost Per Square Foot
      • Work Center Footprint = Machine Length * Machine Width * Allowance Factor
        • Machine length (specified by the machine property Machine Length)
        • Machine width (specified by the machine property Machine Width)
        • Allowance factor (specified by the machine property Allowance Factor For Machine Footprint)
    • Fire Factor (specified by the Digital Factory variable Fire Insurance Factor; 0.001 in aPriori starting point Digital Factories)
    • Loss Factor (specified by the Digital Factory variable Loss Insurance Factor; 0.1 in aPriori starting point Digital Factories)
    • Liability Factor (specified by the Digital Factory variable Liability Insurance Factor; 0.1 in aPriori starting point Digital Factories)
  • Utilities = Annual Rent * (Electric Factor + Heat/Gas Factor + Water Factor)
    • Annual Rent = Work Center Footprint * (1 + Nonproduction Footprint Factor) * Annual Cost Per Square Foot
      • Work Center Footprint = Machine Length * Machine Width * Allowance Factor
        • Machine length (specified by the machine property Machine Length)
        • Machine width (specified by the machine property Machine Width)
        • Allowance factor (specified by the machine property Allowance Factor For Machine Footprint)
    • Electric Factor (specified by the Digital Factory variable Facility Electricity Factor; 0.01 in aPriori starting point Digital Factories)
    • Heat/Gas Factor (specified by the Digital Factory variable Facility Heat and Gas Factor; 0.1 in aPriori starting point Digital Factories)
    • Water Factor (specified by the Digital Factory variable Facility Water Factor; 0.01 in aPriori starting point Digital Factories)

Support Services Cost

Support staff is modeled as a fixed overhead. aPriori estimates the budget for the support group based on the planned capacity for the factory. Support services are the fully burdened salaries and expenses for the following groups:

  • Quality

  • Maintenance

  • Planning & Purchasing

  • Engineering

  • Tool Crib

Support Services Cost = Quality Support Cost +
Maintenance Support Cost +
Purchasing Support Cost +
Engineering Support Cost + Tool Crib Support Cost

  • Quality Support Cost = Quality Support Hourly Rate * Quality Support Allocation * Work Center Capacity
    • Quality support hourly rate (specified by the Digital Factory variable Quality Support Hourly Rate)
    • Quality support allocation (specified by the Digital Factory variable nQuality Support Allocation)
    • Work Center Capacity = Hours per Shift * Number of Shifts * Working Days per Year
      • Hours per shift (specified by the Digital Factory variable Hours Per Shift)
      • Number of shifts (specified by the Digital Factory variable Number Of Shifts)
      • Working days per year (specified by the Digital Factory variable Working Days Per Year)
  • Maintenance Support Cost = Maintenance Support Hourly Rate * Support Allocation * Work Center Footprint * (1 + Nonproduction Footprint Factor) * Annual Earned Machine Hours
    • Maintenance support hourly rate (specified by the Digital Factory variable Maintenance Support Hourly Rate)
    • Support allocation (reciprocal of the Digital Factory variable Maintenance Worker Coverage)
    • Work Center Footprint = Machine Length * Machine Width * Allowance Factor
      • Machine length (specified by the machine property Machine Length)
      • Machine width (specified by the machine property Machine Width)
      • Allowance factor (specified by the machine property Allowance Factor For Machine Footprint)
    • Nonproduction footprint factor (specified by the Digital Factory variable Non Production Footprint Factor; 0.3 in aPriori starting point Digital Factories)
  • Annual Earned Machine Hours = Work Center Capacity * Machine Uptime Percent
    • Work Center Capacity = Hours per Shift * Number of Shifts * Working Days per Year
      • Hours per shift (specified by the Digital Factory variable Hours Per Shift)
      • Number of shifts (specified by the Digital Factory variable Number Of Shifts)
      • Working days per year (specified by the Digital Factory variable Working Days Per Year)
    • Machine Uptime Percent (specified by the machine property Machine Uptime Percent)
  • Purchasing Support Cost = Purchasing Support Hourly Rate * Purchasing Support Allocation * Work Center Capacity
    • Purchasing support hourly rate (specified by the Digital Factory variable Purchasing Support Hourly Rate)
    • Purchasing support allocation (specified by the Digital Factory variable Purchasing Support Allocation)
    • Work Center Capacity = Hours per Shift * Number of Shifts * Working Days per Year
      • Hours per shift (specified by the Digital Factory variable Hours Per Shift)
      • Number of shifts (specified by the Digital Factory variable Number Of Shifts)
      • Working days per year (specified by the Digital Factory variable Working Days Per Year)
  • Engineering Support Cost = Engineering Support Hourly Rate * Engineering Support Allocation * Work Center Capacity
    • Engineering support hourly rate (specified by the Digital Factory variable Engineering Support Hourly Rate)
    • Engineering support allocation (specified by the Digital Factory variable Engineering Support Allocation)
    • Work Center Capacity = Hours per Shift * Number of Shifts * Working Days per Year
      • Hours per shift (specified by the Digital Factory variable Hours Per Shift)
      • Number of shifts (specified by the Digital Factory variable Number Of Shifts)
      • Working days per year (specified by the Digital Factory variable Working Days Per Year)
  • Tool Crib Support Cost = Tool Crib Support Hourly Rate * Tool Crib Support Allocation * Work Center Capacity
    • Tool Crib support hourly rate (specified by the Digital Factory variable Tool Crib Support Hourly Rate)
    • Tool Crib support allocation (specified by the Digital Factory variable Tool Crib Support Allocation)
    • Work Center Capacity = Hours per Shift * Number of Shifts * Working Days per Year
      • Hours per shift (specified by the Digital Factory variable Hours Per Shift)
      • Number of shifts (specified by the Digital Factory variable Number Of Shifts)
      • Working days per year (specified by the Digital Factory variable Working Days Per Year)