Empirical cost calculation
: Why do cost variations occur in the car manufacturing process?

  • Martin Falkborn
  • Patrik Gustavsson
  • Gustav Olsson

    Student thesis: Bachelor


    Volvo Cars Corporation is a large multinational company known worldwide. The competition is constantly increasing as well as the demands and the expectations from the customers. As in most companies there are possibilities to improve performances, at least in certain areas. One part of Volvo Cars Corporation is Volvo Cars Body Components situated in Olofström. During their process of the New Car Program, where a new car model is developed, cost variations occur. Our aim in this dissertation is to identify the important factors causing cost variations and find possible ways to reduce them.

    The research is conducted with mainly two sources, qualitative interviews and secondary data. The empirical findings are then combined with the theoretical framework in order to achieve an understanding of the processes and the effect on the cost variations.

    In the behavioural case study several possible factors for cost variations are identified. The most important are Product Change Request’s in combination with Change Orders as well as Process Change Requests. Our main suggestion to reduce the risk that these variations occur is that more emphasis should be put on the first part of the New Car Program.

    Date of Award2007-Jan-01
    Original languageEnglish

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    • Law (505)

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