Pricing of a mechanical component

Replies

• 

  Kedar Malwadkar

  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

  Kedar Malwadkar

  I think you forget "profit" in the numerator.

  
  whatever it is , just elaborate it.
• 

  Kedar Malwadkar

  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

  what about transportation cost?
• 

  zaveri

  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

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

  zaveri

  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

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

  Ramani Aswath

  zaveri

  but nowadays most companies who purchase standard components do not care about the brand.

  Manufacturing entities with ISO kind of certifications do.
• 

  zaveri

  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.