Manufacturing Analysis

Annual Production Quantity and Basic Processing Cost (Pc)

Quantity Processing Cost - Overview

Process Cost Factors

In order to represent the basic processing cost of an ideal design for a particular process, it is necessary to be clear upon which factors it depends. The factors are :-

  • Equipment costs including installation
  • Operating costs (labour, No of working shifts supervison and overheads)
  • Processing time(s)
  • Tooling costs
  • Product demand

The Formula Used

These variables are taken into account to calculate the basic processing cost Pc using the following formula:-

Basic Processing Cost Pc = αT + β/N where :-

Variable Description
α is the cost of setting up & operating the process, including plant, labour, supervision & overheads per second.
T is the process time in seconds for processing the ideal design.
β is the process specific total tooling cost for an ideal design.
N is the total production quantity per annum.

Processes Scope

This manufacturing cost estimating demonstrator uses the data from the plots of N against Pc for the 20 processes covered. To improve the accuracy of the results for your company is necessary to obtain data for your parts /suppliers.