Posts Tagged ‘shop rate’

Engineer To Order Material Costs

Now that we have been investigating many of the details of material costs in quotations, we will now take a look at the mathematical calculations required. Engineer To Order Material Costs Step 1)  Determine the quantity of parts required.   This is the number of parts required to make the end product.  In many situations…

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Raw Material Sheets Cost Calculation

Raw material sheets include plates, sheets, plywood and any other commodity item which is x,y and thickness dimensional.  Raw material is usually purchased by weight and is a commodity.  I’m going to define commodities as items where their price fluctuates constantly based on market forces.  Some commodities you have heard of is soybeans, wheat, oil,…

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Fixed and Variable Costs

There are two main types of costs – fixed and variable.  If something is being manufactured, it consists of both fixed and variable costs.  Fixed costs are those that do not change based on a quantity.  This means the cost is fixed if you produce 1 or 1000 pieces.  Some of these costs would be…

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Job Costing Software

Job Costing has been around for many years to determine the cost of manufacturing a given product.  The process by which the expenses are record is costing.  Job costing software should make the process of recording the transaction simpler and not more difficult and time consuming.  Job costing software is not like cost accounting because it does…

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Techniques for Cost Estimating

The basic cost estimating techniques involve analyzing all factors that make up a cost estimate. The first technique I would follow is to go through the following steps, systematically, and costing each one out in detail. Once you have gone through the basic steps, you will have all the cost information required for the estimate. 1.…

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Cost Estimate Types

There are different types of cost estimates including “Rough Approximation” of cost which can be a conceptual design, preliminary design and then a detailed estimate or quote. Rough Approximation The rough approximation is really prepared for informational purposes only.   This type of estimate may not have geometry or even materials but just a rough idea…

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Estimating is more than Setup and Run Time Part 2

In the not to distant past many manufacturing processes were very labor intensive.  In countries such as China and India there is still a great deal of manual labor intensive manufacturing.  I remember as a child I worked in my Father’s sheet metal shop and the machine of choice was a Strippit 30/30.  I have…

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How To : Manufacturing Hourly Rate Calculation

Sheet metal, CNC shops, machine shops and many other job shops provide a valuable service to their customers.  For a job shop to be a profitable business, the service rate should cover the cost of doing business plus have a certain amount of margin or profit built into the price customers pay. If this is too low,…

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Manufacturing Efficiency in Estimating

How many of you have estimated a job and wonder how anyone could do it any cheaper and make money?  Well your not alone in your thinking.   There are manufacturers that are using reverse auctions in order to try to get more work and pick up new customers.   The problem is when you…

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Fabrication Workcenter Overhead Rates

When you quote a job and its operations you need to make sure you quote it accurately. Its very important to know that when you quote a job that your rates are high enough to actually turn a profit. [polldaddy poll=2007715] Welcome to the MIE Solutions Job Shop Estimating blog. Fabrication software as in sheet…

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