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Pricing of a mechanical component

Question asked by zaveri in #Mechanical on Jul 21, 2012
zaveri
zaveri · Jul 21, 2012
Member of CrazyEngineers
Talking about the standard components like bolts, nuts etc, which are produced in mass, it is well known that the greater the quantity produced, the lesser will be the cost per piece.

now the cost of production per piece may be like:

(raw material cost + tooling cost + machining cost + labour )/the number of components produced

is this right ? Posted in: #Mechanical
Kedar Malwadkar
Kedar Malwadkar · Jul 21, 2012
Member of CrazyEngineers
zaveri
Talking about the standard components like bolts, nuts etc, which are produced in mass, it is well known that the greater the quantity produced, the lesser will be the cost per piece.

now the cost of production per piece may be like:

(raw material cost + tooling cost + machining cost + labour )/the number of components produced

is this right ?
I think you forget "profit" in the numerator.
zaveri
zaveri · Jul 22, 2012
Member of CrazyEngineers
Kedar Malwadkar
I think you forget "profit" in the numerator.

whatever it is , just elaborate it.
Kedar Malwadkar
Kedar Malwadkar · Jul 22, 2012
Member of CrazyEngineers
zaveri
whatever it is , just elaborate it.
I am agree with you, but just need to add profit ( it should be very small amount for bolts and nuts.)

That makes the equation
(raw material cost + tooling cost + machining cost + labour+profit )/the number of components produced
white_hat
white_hat · Jul 22, 2012
Member of CrazyEngineers
what about transportation cost?
zaveri
zaveri · Jul 23, 2012
Member of CrazyEngineers
white_hat
what about transportation cost?
Oh yes i knew i was forgetting something.

but then transportation cost , i think appears to be like : fuel cost + driver's wage + vehicle maintainance.
Ramani Aswath
Ramani Aswath · Jul 23, 2012
Member of CrazyEngineers
There is a brand cost as well. Standard companies will charge a premium (higher profit than others).
zaveri
zaveri · Jul 23, 2012
Member of CrazyEngineers
bioramani
There is a brand cost as well. Standard companies will charge a premium (higher profit than others).
but nowadays most companies who purchase standard components do not care about the brand.
white_hat
white_hat · Jul 23, 2012
Member of CrazyEngineers
Dude you keep forgetting things...! Now what about designing and testing,that is going to cost a fair amount of money.
Ramani Aswath
Ramani Aswath · Jul 23, 2012
Member of CrazyEngineers
zaveri
but nowadays most companies who purchase standard components do not care about the brand.
Manufacturing entities with ISO kind of certifications do.
zaveri
zaveri · Jul 24, 2012
Member of CrazyEngineers
white_hat
Dude you keep forgetting things...! Now what about designing and testing,that is going to cost a fair amount of money.
Standard components do not require designing.

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