Research On The Module Of Order-conversion-cost For ETO

In mass customization, ETO is a higher degree of customization: request of customization from the design part. High-accustomed ETO companies in the production process, faced with a problem: When one order converses to another order, the enterprise must organize manpower, material and financial resources to support the conversion. Consumption means costs. Seriously, conversion for ETO companies is very frequent. Orders-conversion-cost have brought troubles for ETO. Based on that, this paper attempts to probe into Orders-conversion-cost for the ETO companies.This paper analyzed the status and limitations of the cost study for ETO enterprise. The specific form and characteristics of OCC were analyzed, and the concept of OCC was first proposed. Using traditional manufacturing cost for reference, effect factors of OCC in six aspects with fishbone diagram were analyzed. Based on this, expert analysis technology was used to extract the key effect factor of OCC: instruments depreciation, manpower resource consumption, material consumption, energy consumption, time delays.Based on the key effect factors, objective functions of instruments depreciation, manpower resource consumption, material consumption, energy consumption of OCC were built by cost-accounting. The cost coursed time delay was estimated by expert analysis. Then, the objective function of module was built and explained. After obtaining the OCC for a single order, the module of multiple OCC was built by dynamic programming.Finally, the result of this study was applied to business practice. Taking an insulator production of a transformer Co., Ltd. for example, the key affect factors of OCC were analyzed and the OCC was got. This case solved the problems of cost accounting in the order-conversion and improved the company's cost control program.