Professional Documents
Culture Documents
Mechanical Engineering
University of Gaziantep
Dr. A
D
A. T
Tolga
l B
Bozdana
d
Assistant Professor
Some Terminology
Final products made by the industries can be divided into two major classes:
Consumer goods: products purchased directly by consumers (e.g. TV, car, tires etc.)
Capital goods: purchased by other companies to produce goods and supply services
(e.g. aircraft, machine tools, construction equipment etc.)
Production q
quantity:
y refers to the number
of products produced annually (n):
low production: n < 102
medium production: 102 < n < 104
high production: 104 < n
2
Break-Even Analysis
This analysis is conducted to determine break-even point for a product where its production
cost (i.e. total cost) is equal to its revenue (i.e. money earned by sales).
Total
T t l costt off a product
d t involves
i
l
fi d and
fixed
d variable
i bl costs:
t
Fixed Costs: costs that are not directly related to level of production (e.g. .rents and rates,
research & development,
development marketing,
marketing machinery,
machinery administration,
administration etc.)
etc )
Saales&Co
osts
Variable Costs: vary directly with level of production (e.g. raw materials, labour, tooling, etc.)
PROFIT
BreakEven
Point
Variable
V
i bl
Costs
LOSS
Fixed
Costs
ProductionQuantity
CC C L
C CM
~
n
n
CM : material cost per unit
CC : capital
p cost of machineryy and toolingg
CL : labour cost per unit time
n : production quantity
: production rate
Courtesy of: Process Selection: From Design to Manufacture, K.J. Swift & J.D. Booker, 2003
Concluding
g Remarks:
The achievement of good quality in above aspects is influenced by producibility of
parts as well as the assembly
y of p
parts together.
g
individual p
For this purpose, the design methodologies (DFM / DFA) should be incorporated.
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