| Cost Data | Forging | Extrusion |
| One-off cost | £50 | £600 |
| Hourly cost | £65/hour | £50/hr |
| Production rate | 1000 parts/hour | 500 metres/hour |
In the tutorial we saw that the total cost is made up of the material cost, the startup cost and the running cost. These figures are not easy to obtain, and vary significantly depending on the size and complexity of the part. Here we choose representative values from manufacturers data, and assume the material cost is about 1 penny.
Notice that the production rate for extrusion is in metres/hour and not parts/hour. The number of pins made per hour depends on the size of each pin - let's say this is about 1cm. In 1 hour we can extrude 500 metres which will make 500 * 100 = 50,000 pins. As a result, we could also say the production rate for extrusion is about 50,000 pins/hour.
Let's see how these figures can be turned into a cost for each pin...
| COSTS | Batch size | Running costs (= hourly cost ÷ production rate) |
Startup costs (=one-off cost ÷ batch size) |
| Forging: | 100 | £65/hour ÷ 100 parts/hour = 6.5p per part | £50 ÷ 100 parts = 50p per part |
| 100,000 | £50 ÷ 100000 parts = 0.05p per part | ||
| Extrusion: | 100 | £50/hour ÷ 50000 parts/hour = 0.1p per part | £600 ÷ 100 parts = £6 per part |
| 100,000 | £600 ÷ 100000 parts = 0.6p per part |
The startup cost varies with batch size, so we really need to work out the cost for each possible batch size. Let's assume that the material costs are 10p and put the whole lot together to work out the total cost...
| Process | Material cost | Running cost | Startup cost | Total cost |
|---|---|---|---|---|
| Forging: | 1p | 6.5p | £50 ÷ 100 = 50p | 57.5p |
| Extrusion: | 1p | 0.1p | £600 ÷ 100 = 600p | 601.1p |
Batch size:
Try entering different batch sizes to see how the total cost varies.
As before, a simpler way of dealing with this information is to plot the total cost for each process on a graph...
The analysis of the process cost shows that the best way to manufacture plug pins in large volumes (over 10,000) is to use extrusion. In practice, there are many other factors which might alter this decision, for example:
There is at least one more important factor which affects all manufacturers equally - standards. If you look on the back of any plug in the UK you should see BS1363 or 1363A - this means it conforms to a particular British Standard. Standards are important in protecting consumers by ensuring products meet a minimum safety level. BS1363 sets levels for plug performance including strength, toughness and fire-resistance - all of which may a limit a designer in their choice of materials and processes.
Most product analysis tends to ignore many of these complications, but remember that real-life designers must check their decisions in much more detail than we have done here.
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