Greg said
“Mike, I have manufacturing experience, but do not know the microprocessor they are using, nor the bit rate or memory size, so difficult to make the real assessment.”
Greg , I understand what you are getting at , but as you know , overheads are one of the biggest factors controlling price .
To go into detail would cause a bit of eye glazing , but what people fail to see are the costs of manpower such as —
Draughtsmen , Buyers , Progress Chasers , Planning , Forward Cover , Record Keeping , Market Research , After Sale Support (including Modification and recording of that) , Advertising , Free Lunches for Potential Customers , Free Models for Magazines to Assess , Prototype Research and Recording and more . Tool makers and associated machinery cost a packet .
Then there’s Maintenance of Buildings , Electric Bills ------I think this is getting boring already so suffice it to say that Overheads come out at 200% or more----the maintenance of a clean room alone comes out at colossal rates .
Then you have to consider profit . And Insurance against liitle Jimmy hurting his finger on a model and suing the ass off the company .
So , as I said , is there a professional Costing Engineer here ?
Part of my previous life was taken up seeing that manufacturers don’t over-egg the pudding when designing and building Military Radars ; I learned a lot about hidden costs .
Some of you may say “we know all that” , but possibly find it an inconvenient truth .
You may even think some of the above items a bit flippant , but add them all up and you may get some idea of why and how of costs come about .
And bear in mind , the above does not cover everything .
Here’s a little exercise for you to think on , how much would it cost to send two engineers for a week to survey a simple railway wagon and produce satisfactory data to enable further work toward production ?
Just base it on your salary , travel expenses and living allowance (food and hotel).
Mike
