3 Root and Site Cost Model Formulas

This chapter describes the formulas in the Root and Site cost models. These formulas are evaluated at each node in the current process-level routing that has a taxonomy module, including at the routing’s top-level node, after all the other taxonomy modules have been evaluated. The formulas are contained in two modules: the rollup module and the global taxonomy module. These modules serve three purposes:

 Define highest-level cost categories, such as fully burdened cost, piece cost, and total amortized investment.

 Provide default formulas for the quantities that are required in order to calculate these high-level costs (fully burdened cost, piece cost, amortized investment, and so forth).

 Aggregate the results from the current node’s child nodes in the current routing.

The site cost model is initially the same as the root cost model, but it can be customized by users of the Cost Model Workbench.

See also the User Guide chapter aPriori Cost Tables for information on the various cost categories.

This chapter includes the following topics:

• Fully Burdened Cost

• Piece Cost

• Other Direct Costs

• Amortized Investment