Development of a Cost Estimation Model in a Furniture Manufacturer

This work was developed to improve the costing process of new products within the Product Development Department of a furniture manufacturer. It consisted of creating a parametric cost estimation model based on applying simple and multiple linear regressions, considering the existing data of the products produced and their respective costs. The proposed model considers the cost estimation of creating a product that covers the materials and operations costs. The suitability of the different independent variables was studied by applying simple and multiple linear regressions. A set of functions that return an estimate of the cost as a function of these predictor variables was obtained. The model built with the functions obtained provides the materials and operations cost estimation. The results indicated that 75% of the tests performed show an estimation error of less than 2% in the total cost of a product. Incorporating this model in a tool with the purpose of cost estimation brings the ability to predict prices faster, improving the internal process of obtaining costing and enhancing the analytical capacity of the team in the relentless pursuit of cost minimization and value creation.