In today’s competitive markets, understanding the structure of the costs of a product is essential to the improvement of the process as well as to a correct pricing strategy.

The production cycle of a sheet metal product involves several phases from the raw material to the product ready for delivery which include: cutting, roll forming, bending, welding, punching, laser cutting, assembly of possible accessories, painting and packaging.

My previous articles are focused on:

Understanding the scrap rate generated by different cutting processes

How to calculate the hourly cost and rate of a sheet metal production system

How to calculate the productivity and efficiency of a sheet metal production system

We have seen how some of these parameters, for example the Efficiency of a machine or its Hourly Cost, depend from a number of estimations and strategic decisions the entrepreneur has to take. We have always to bear in mind, that the result of the calculation will be affected by all these decisions.

Here, I will use some of the concepts and ideas of these articles and propose a method to estimate the production cost of a single sheet metal product, and of a full batch.