1/30/2024 0 Comments Easy sweepI’d hate to see us start down that path because no matter how well we inspect, we lose control over the component if it isn’t made here. Why can’t that time be spent making internal design changes to get us in line with the outsourced unit? We try not to outsource here at Easy Sweep. We already have a missing charge for development in cost estimate, don’t we? And you want to add the amount of time and effort that goes into design to outsource the unit. Also, our design team will spend significant time working with the supplier. With more inspections, we can guarantee quality. We would clearly need to do more inspection, which would drive costs back up by $3 per unit, so our cost gaps would likely be $13.50 and $24.50 respectively. How can we guarantee this? Paul: We have done a lot of work in the past with this supplier. Won’t we lose control of quality and open ourselves up to potential problems in the market? We’re known for our quality. Mark Eaton, marketing VP: I’m not happy with the thought of outsourcing a key part of the vacuum. I still don’t think management will be happy with these results. That gets us $21.25 closer to our target cost, closing the gap to $10.50 for the ES 600 and $21.50 for the ES 600. Lisa: If I get your numbers right, we could eliminate $15 in direct cost and $6.25 in manufacturing overhead if we outsource the drive engine. I don’t know what we can do with the other overhead here, which is where an awful lot of the cost is going. That would also reduce labor by $5 and overhead by the 125% of labor that we use for our plant-wide rate. I got a quote, and we could reduce the cost of materials by $10 per model if we outsource it. That’s the most expensive part and it uses components that are unique to these vacuums. Paul Gable, design engineer: Lisa, I don’t know how we can take much out of the cost unless we outsource the making of the drive engine. We would barely make a profit with these costs the way they are. Some of the comments made at the meeting are: Lisa: We’ve got a real problem with these first-pass estimates. Seeing that the current costs consume almost all of the company’s selling price, Lisa Adams, VP of manufacturing, calls together the design team. The resulting target cost and current estimated costs for producing the two vacuum models are in the table below. The company likes to make a 25% profit on all of its models. The company sells its vacuums to the distribution channel at roughly 60% of the retail price, making the target price for the ES 600 model $144, while the target price for the ES 800 model is $174. The ES 600 will retail at $240, while the commercial-grade ES 800 will retail at $290. They plan to produce two models, the ES 600 and the ES 800. Easy Sweep’s management has recently decided to enter the market for bagless vacuum cleaners and has designed a product that meets the company’s high-quality image. It is now a multibillion-dollar producer of high-end vacuum cleaners using an international distribution network of retail outlets and specialty shops. It has been making vacuum cleaners for more than 50 years, starting with one small model that was sold door-to-door. Easy Sweep makes vacuum cleaners for both residential and commercial customers. Meets the requirements of FMVSS 302.Ĭolors: Black, Brown, Gray, Terra Cotta, Olive Green, White.CASE 6.1 TARGET COSTING AND VALUE ENGINEERING. This matting features round rib construction that prevents dirt and mud from caking on or clogging its surface. Easy Sweep Round Rib Vinyl Matting is a long lasting, all purpose matting for use in industry, homes and office buildings.
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