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  • Pricing of a mechanical component

    zaveri

    zaveri

    @zaveri-5TD6Sk
    Updated: Oct 22, 2024
    Views: 922
    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 ?
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Replies

  • Kedar Malwadkar

    Member • Jul 21, 2012

    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.
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  • zaveri

    Member • Jul 21, 2012

    Kedar Malwadkar
    I think you forget "profit" in the numerator.

    whatever it is , just elaborate it.
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  • Kedar Malwadkar

    Member • Jul 21, 2012

    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
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  • white_hat

    Member • Jul 22, 2012

    what about transportation cost?
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  • zaveri

    Member • Jul 22, 2012

    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.
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  • Ramani Aswath

    Member • Jul 22, 2012

    There is a brand cost as well. Standard companies will charge a premium (higher profit than others).
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  • zaveri

    Member • Jul 23, 2012

    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.
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  • white_hat

    Member • Jul 23, 2012

    Dude you keep forgetting things...! Now what about designing and testing,that is going to cost a fair amount of money.
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  • Ramani Aswath

    Member • Jul 23, 2012

    zaveri
    but nowadays most companies who purchase standard components do not care about the brand.
    Manufacturing entities with ISO kind of certifications do.
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  • zaveri

    Member • Jul 23, 2012

    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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