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How to calculate the total manufacturing cost of sheet metal products

Published: - 06/05/2017 Author: Scaccabarozzi, Ed. Staff
How to calculate the total manufacturing cost of sheet metal products

In today's competitive markets, understanding the structure of the costs of a product is essential to the improvement of the process, as well as to a correct pricing strategy.

The production cycle of a sheet metal product involves several phases from the raw material to the product ready for delivery which may include: cutting, forming, welding, assembly of possible accessories, painting and packaging.

The previous articles were focused on:
1. Understanding the scrap rate generated by different cutting processes
2. How to calculate the hourly cost and rate of a sheet metal production system
3. How to calculate the productivity and efficiency of a sheet metal production system

Dallan has seen how some of these parameters, for example the efficiency of a machine or its hourly cost, depend from a number of estimations and strategic decisions the entrepreneur has to take. We have always to bear in mind, that the result of the calculation will be affected by all these decisions. Here, we will use some of the concepts and ideas of these articles and propose a method to estimate the production cost of a single sheet metal product, and of a full batch.

Follow this link to the full article, including the iteration of the formula for processing cycles involving multiple stages.