• January 27, 2023
  • Machine Tools
  • Cutting Tools
  • Software
  • Metrology
  • Accessories
  • Mechatronics
  • About us
  • Contact us
  • REGISTER
  • SIGN IN
www.cnctimes.com logo
  • News
  • CT+
  • Webinar
  • Knowledge Center
    • INDUSTRY UPDATES
    • INTERVIEWS
    • VIDEOS
    • TECHNICAL ARTICLES
    • CASE STUDIES
    • PRODUCT SHOWCASE
    • BLOGS
    • SUCCESS STORIES
    • NEWSLETTERS
  • Start Your Subscription
  • Register
  • Sign in

Information

Please login to give the feedback.

Subscription Plans

Subscription Type
Duration
Months
News
Articles
Blogs
Case Studies
Videos
Product Updates
Webinar
Amount
CT
Lifetime
Lifetime
Full Access
Limited Access
Full Access
Limited Access
Limited Access
Limited Access
No Discount
INR 0.00
CT+
6 Months
6 Months
Full Access
Full Access
Full Access
Full Access
Full Access
Full Access
5% Discount
INR 599.00
CT+
Annual
12 Months
Full Access
Full Access
Full Access
Full Access
Full Access
Full Access
10% Discount
INR 999.00

Subscription Plans

Subscription Type
Duration
Months
News
Articles
Blogs
Case Studies
Videos
Product Updates
Webinar
Amount
CT
Lifetime
Lifetime
Full Access
Limited Access
Full Access
Limited Access
Limited Access
Limited Access
No Discount
INR 0.00
CT+
6 Months
6 Months
Full Access
Full Access
Full Access
Full Access
Full Access
Full Access
5% Discount
INR 599.00
CT+
Annual
12 Months
Full Access
Full Access
Full Access
Full Access
Full Access
Full Access
10% Discount
INR 999.00
Successfully registered. Please check your email to activate account.

Registration
  • Sign In



Sorry Captcha Unsuccessful!!

Sign In


OR
If your not registered user first Register
  1. Home
  2. Technical Articles
  3. Use of Costing and Quoting in the Metal Fabrication Industry

Use of Costing and Quoting in the Metal Fabrication Industry

05 October, 2020
  • Tweet
  • share via email
Your comment has been posted.
We have sent you a verification email. To verify, just follow the link in the message.
Some technical error. Please try again.

By Niraj M Wanikar, Chief Editor, CNCTimes.com, 2020-10-05 14:44:00

 

(Excerpt from an article originally appearing in the Fabricating and Metalworking magazine, written by SigmaTEK’s VP of Engineering, Glenn Durham)

Few factors have a bigger impact on the sales, health, and bottom line of your business than costing and quoting. Most of us realize that if we set our prices too high then our products and services will not sell, but the problem is often the opposite: we price too low. How do we set prices?

The film Jerry Maguire made popular the phrase, “Show me the money!” The metal fabrication industry is a long way from the world of high-profile sports agents, but the same principle applies you need to see the money. And that means we need to think well about the prices we quote. Few factors have a bigger impact on the sales, health, and bottom line of your business than costing and quoting. Most of us realize that if we set our prices too high then our products and services will not sell. But the problem is too often the opposite: we price too low. (Some reports suggest that 80 percent of pricing in the metal fabrication business is too low!) It’s easy to panic when our quotes that we sent do not always produce orders. How do we set prices?

WE NEED TO KNOW THE PART COST

Figure 1. CAD/CAM software calculates the cost of the titanium material used here based on the raw material cost and the amount of material used, which can be either the actual material needed to make the part (True Shape) or the amount used by the smallest rectangle the part will fit in (Rectangular Shape). Knowing these, an estimator can quickly determine the least-and-most cost range. Operating Costs here can include the costs to operate the machine, consumables, shop overhead, and even the operator’s time.

Correct pricing begins with knowledge – and the first thing we must know is the actual cost of the parts produced. In metal fabrication, that means the cost of materials, machines, and manpower. Figure 1 shows a typical CAD/CAM software costing. Notice that the software calculates the cost of the material used (in this case titanium) based on the raw material cost and the amount of material used. The material used can be either the actual material needed to make the part (the True Shape Material Cost) or the amount of material used by the smallest rectangle that the part will fit in (the Rectangular Shape Material Cost). By knowing both costs, the Estimator can quickly determine a least cost and a most cost range. Notice that the software also provides an Operating Costs. This calculation can include the cost to operate the machine, the cost of consumables, the shop overhead costs, and even the cost of the operator’s time.

WE NEED TO KNOW THE NESTED COST

 Part cost alone is often insufficient to make an accurate quote, however. For that, the estimator needs to know the nested cost: the cost of the part as it sits on the material that is cut. Nested cost accounts for the extra material that is lost to scrap around the part. In Figure 2, you see that the cost of the part (when considering the nest) is $13.35 rather than $13.16. This is a more accurate and complete picture of the cost of making this part.

Figure 2. For accurate quoting, an estimator needs to know the nested cost – the cost of the part as it sits on the material that is cut – that accounts for the extra material lost to scrap around the part. In this example, the cost of the part (when considering the nest) is $13.35 rather than $13.16, a more accurate calculation.

  • Follow @CNCTimes

Captcha is required.
Sorry Captcha Unsuccessful!!

Latest Technical Articles

  • 27 September, 2022

    Chapter 3: Importance of water-cooled bearing housing in turbocharger assembly

  • 26 September, 2022

    Chapter 2: Importance of brake calliper housing and calliper bracket in automotive braking system

  • 23 September, 2022

    Chapter 1: Importance of brake caliper housing in automotive braking system

  • 23 September, 2022

    Chapter 2: Importance of water-cooled bearing housing in turbocharger assembly

  • 15 September, 2022

    Chapter 1: Importance of water-cooled bearing housing in turbocharger assembly

  • 12 September, 2022

    Chapter 2: Importance of Fixed seal master cylinder precision machining in automobile braking system

  • 08 September, 2022

    Chapter 1: Importance of Fixed seal master cylinder precision machining in automobile braking system

  • 07 September, 2022

    Chapter 2: Importance of Tandem Master Cylinder precision machining in automobile braking system

  • 02 September, 2022

    Chapter 1: Importance of Tandem Master Cylinder precision machining in automobile braking system

  • 29 August, 2022

    Compressor housing Aluminum optimized process sequence

  • 25 August, 2022

    Chapter 2: Steering knuckle physical machining process op20

  • 24 August, 2022

    Chapter 1: Steering knuckle physical machining process op10-Operation 1

  • 22 August, 2022

    The detailed machining process for Cast Iron Steering knuckle

  • 17 August, 2022

    How to reduce the manufacturing cycle time of Turbocharger Compressor Housing

  • 11 August, 2022

    How to reduce cycle time for machining Steering Knuckle by 70%

  • 19 July, 2022

    Parametric Modelling

  • 28 June, 2022

    Journey from being a busy man to an efficient man!

  • 23 June, 2022

    Cool man knows how to manage work with cool mind

  • 20 June, 2022

    Satellite Man? All about easy documentation

  • 14 June, 2022

    Scheduled Man: All about forecasting and scheduling skills

  • 06 May, 2022

    Choose CNC jaw sets of right material

Previous Next

Related Technical Articles

  • 23 March, 2022

    Let's collect data to improve

    Category: Software
  • 21 February, 2022

    Paid Technical Articles

    Category: Software
  • 03 April, 2019

    Digital Twins, The Birth of Constant Optimization: Siemens

    Category: Software
  • 09 June, 2017

    ESPRIT’s 2017 software update

    Category: Software
  • 23 January, 2017

    Taking the plunge in turning

    Category: Software
  • 03 April, 2014

    Reverse engineering and its importance in new product development

    Category: Software
  • 20 September, 2013

    Optimising Multi-axis CNC Productivity

    Category: Software
  • 14 September, 2013

    Reverse Engineering

    Category: Software

TESTIMONIALS VIEW MORE

By Niraj M Wanikar, Chief Editor, CNCTimes.com, 2019-11-19 17:57:22We would like to express our sincere appreciation for your service to us.You have provided us best marketing platform through CNCTime...

Mr.Adil Atar, Ass.Mng.Technical Sales & Service: Precision Machinekraft

By Niraj M Wanikar, Chief Editor, CNCTimes.com, 2016-10-21 09:00:00Dedication and determination is key to success and CNC Times team is evident to it - FARO Business Technologies (I) Pvt Ltd

Ms. Amrita Gokhale , FARO Business Technologies

By Niraj M Wanikar, Chief Editor, CNCTimes.com, 2016-08-25 00:00:00Seminar was really very good, please let us know about future seminars. we would like to attend the seminar on "Machining of the mate...

Roshan Deshmukh, Design Engineer - Ashvini Magnets Private Limited

FOLLOW US

TECHNOLOGY FOCUS

    Machine Tools

    • CNC Lathe
    • Boring Machines
    • Drilling Machines
    • Spark Erosion
    • Wire Cut
    • Vertical Machining Centers - VMC
    • Horizontal Machining Centers - HMC
    • Grinding Machines
    • Gear Cutting Machines
    • Additive Manufacturing - RP
    • Multi-Axis Machines
    • Multi-Tasking Machines
    • Welding Machines
    • Presses
    • Laser Cutting
    • Others
    • IIoT

    Metrology

    • CMM
    • VMM ( Vision Measuring Machines )
    • PCMM ( Portable CMM )
    • Measuring Instruments
    • Probing Technology
    • 3D Scanners
    • Roundness Measurement
    • Surface Roughness Measurement
    • Contour Measuring Machines
    • Others

    Accessories

    • Workholding
    • Toolholders
    • Spindles
    • Coolants
    • Others

    Software

    • CAD
    • CAM
    • CAE
    • ERP
    • Inspection Software
    • Reverse Engineering Software
    • MES
    • Others

    Mechatronics

    • Robotics
    • Automation
    • CNC Controllers
    • Others

    Cutting Tools

    • Turning Tools
    • Milling Tools
    • Grinding Wheels
    • Drilling
    • Others

INDUSTRY VERTICALS

  • General
  • Automotive
  • Aerospace
  • Healthcare
  • Healthcare Engineering
  • FMCG
  • Consumer Durable
  • Defence
  • Electronics
  • Oil & Gas
  • Heritage
  • Heavy Engineering
  • Die & Mold
  • Plastic
  • Footwear
  • Jobshop

PROFILE

  • About us
  • Contact us

Terms of use

  • Privacy Policy
  • Payment Policy
  • Refund Policy
  • Terms and Conditions

Follow us on:

Download CNCTimes App:

Play Store
2023 © www.cnctimes.com  | Payment Policy   |   Terms and Conditions
Developed & Maintained by Deven Infotech