Unit cost in mass production

In my first steps of mass production I have created a simple simulation of unit cost per production volume. On the plot we can see a price for two version of the final product – basic and full featured.

mass-production-cost-simulation-20140209

Looks interesting, as components cost highly depends on the order volume, prices can go down when purchasing more and manufacturing more – so called scale effect can bring more products for a lower price per unit. Next step is to negotiate better prices in high volume orders and choose between different distributors, then try the automated machine manufacturing..

2 comments

Marian Suskiewicz

Aby ocenić Twoje obliczenia proszę o podanie modelu (wzoru) do obliczeń, jakie parametry i zmienne rynkowe są uwzględnione przy szacowaniu ceny jednego egzemplarza .

Zasady podane są oczywiste , większa produkcja – cena maleje.

bladooka

Looks like after 500pieces the cost is stabilising. Probably because at some point you are not capable of lower the prices of parts and/or manufacturing more. The lowest price is never zero ;)