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Thread: Cost of Manufacturing

  1. #1
    Associate Engineer
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    Jun 2022
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    Cost of Manufacturing

    Hello


    I got a quote from two manufacturers/prototypers (CNC machining, injection molding, etc.) from china and USA. The priced my compound bow at $7000. I checked google and it takes $300 a unit to manufacture a compound bow. Archery companies sell compound bows for $2000. Hence I am not sure why my manufacturing costs are so high. I am assuming archery companies don't pay $7000 to manufacture a bow then sell it at $2000. What do the archery companies have that I don't?


    Thank you
    Kingofjong

  2. #2
    Technical Fellow Kelly_Bramble's Avatar
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    Initial costs to create injection molding tooling and CNC machining programing for unique parts is cost intensive. Manufacturing development like product NRE (Non- Recurring Engineering) is expensive and costings are amortized over the lifecycle on the end product.

    Average Cost per unit = total costs to produce / # of units produced

    Low volume manufacturing can rarely compete with optimized high volume manufacturing.
    Tell me and I forget. Teach me and I remember. Involve me and I learn.

  3. #3
    New Member
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    Mar 2023
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    That is accurate. Smaller production lines are common in low volume manufacturing, which can lead to higher costs per unit compared to high volume manufacturing because the early costs of tooling and programming must be spread out over fewer units.


    By spreading the set costs over a greater number of units created, economies of scale can be utilized in high volume production to lower the cost per unit. Long-term cost-effectiveness of large volume production may increase as a result.

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