Pricing of a mechanical component

@zaveri-5TD6Sk • Oct 22, 2024

Oct 22, 2024

1.0K

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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Kedar Malwadkar

@kedar-crbktt • Jul 21, 2012

zaveriTalking 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

@zaveri-5TD6Sk • Jul 21, 2012

Kedar MalwadkarI think you forget "profit" in the numerator.

whatever it is , just elaborate it.

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Kedar Malwadkar

@kedar-crbktt • Jul 21, 2012

zaveriwhatever 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

@white-hat-RTFca6 • Jul 22, 2012

what about transportation cost?

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zaveri

@zaveri-5TD6Sk • Jul 22, 2012

white_hatwhat 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

@ramani-VR4O43 • 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

@zaveri-5TD6Sk • Jul 23, 2012

bioramaniThere 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

@white-hat-RTFca6 • 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

@ramani-VR4O43 • Jul 23, 2012

zaveribut 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

@zaveri-5TD6Sk • Jul 23, 2012

white_hatDude 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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