Thursday, May 31, 2007

Cost considerations of machine tools

It is necessary to meticulously consider the economic aspects of various machine tools available for production, to check for their suitability. Recovery of capital investment usually takes 5 to 10 years. Hence, there is no point in buying a new machine tool, if the production cost or time per workpiece will not decrease substantially…

Material cost depends upon the size of the workpiece and condition of the raw material. This will be same for existing and new machine tools, unless there is a change in the production process…

Labour cost or operator wages is higher for general purpose machines, which call for more skilful operators. Special purpose machines, with a higher degree of automation, can do with an unskilled operator, who only has to load and unload workpiece, and press start/stop buttons.

Overheads comprise all indirect costs such as money spent on the maintenance department, tool room (for resharpening tools), clerical staff, methods engineers, managers, even sales personnel and advertising. Overheads are usually expressed in overall percentage which ranges from 50 per cent for small workshops, to 500 per cent for large establishments with modern amenities and a better qualified workforce.

(pp.3-4, ‘Machine Tools Handbook: Design and Operation’ by P.H. Joshi from McGraw-Hill

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