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Metal Foams: A Design Guide

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Cost estimation and viability 203<br />

A, incurring a rental cost of CS P ($/m2 .h), and information, as research and<br />

development costs, or as royalty or licence payments Ci P (expressed as $/h).<br />

The cost equation, containing terms for each of these, takes the form<br />

[Material] [Tooling] [Time] [Energy] [Space] [Information]<br />

# # # # # #<br />

� � � � � � � � � � � �<br />

mCm Ct CL P PCe ACS P Ci P<br />

C D C C C C C<br />

⊲16.1⊳<br />

1 f n Pn Pn Pn Pn<br />

where Pn is the production rate (kg/h) and f is the scrap rate (the material<br />

wastage in the process).<br />

A given piece of equipment – a powder press, for example – is commonly<br />

used to make more than one product, that is, it is not dedicated to one product<br />

alone. It is usual to convert the capital cost, Cc, of non-dedicated equipment,<br />

and the cost of borrowing the capital itself, into an overhead by dividing it<br />

by a capital write-off time, tc (5 years, say) over which it is to be recovered.<br />

Thus the capital-inclusive overhead rate becomes<br />

[Basic OH rate] [Capital write-off]<br />

# #<br />

CL P<br />

� � ��<br />

1 � � Cc<br />

D CL0 P C<br />

⊲16.2⊳<br />

Pn Pn<br />

Ltc<br />

where CL0 P is the basic overhead rate (labor, etc.) and L is the load factor,<br />

meaning the fraction of time over which the equipment is productively used.<br />

The general form of the equation is revealed by assembling the terms into<br />

three groups:<br />

[Material] [Tooling] [Time Capital Energy Space Information]<br />

# # # # # # #<br />

� �<br />

mCm<br />

C D C<br />

1 f<br />

1<br />

n [Ct] C 1<br />

�<br />

CL0 P C<br />

Pn<br />

Cc<br />

�<br />

C PCe C ACS P C PCi ⊲16.3⊳<br />

Ltc<br />

The terms in the final bracket form a single ‘gross overhead’, CL,gross, P allowing<br />

the equation to be written<br />

[Materials] [Dedicated cost/unit] [Gross overhead/unit]<br />

# # #<br />

� �<br />

mCm<br />

C D<br />

C<br />

1 f<br />

1<br />

n [Ct] C 1 � �<br />

CL,gross P<br />

⊲16.4⊳<br />

Pn<br />

The equation indicates that the cost has three essential contributions: (1) a<br />

material cost/unit of production which is independent of production volume

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