Raw Material $ = (Part weight X $/pound) + Scrap %
Labor $ = Press Rate $/ (Press Cycle X Cavities)
Cost = Raw Material + Labor + Packaging + Sales Commission
Set-up Cost = Fixed Mold Set-up Cost/Run Quantity
Therefore: Quantity Pricing = Cost + Set-up Cost
The two unknowns that create the largest variance between the supplier's pricing are:
After the mold has been sampled, these estimates become actuals and the variability in pricing is greatly reduced. However, until that time, molders will estimate the weight and cycle by calling on their experience.
For those of us rusty on algebra, the above equations are saying that part prices are based on the cost of materials, the set-up cost amortized over the run quantity, and the cost of the press time.
The rate assigned to press time takes into consideration the complexity of the molding, the press operator and engineering efforts involved, and the costs of doing business. Therefore, the press rate can vary depending on the project requirements.
