Overview Machining Economics - 1

• • • • • Machine operation costs Single point tool costs Shop Practice Economic lot size Equipment replacement

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ME 6222: Manufacturing Processes and Systems Prof. J.S. Colton

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ME 6222: Manufacturing Processes and Systems Prof. J.S. Colton

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Machine operation costs
• Fixed • Direct • Indirect

Annual fixed costs per year (Cf)
Cf = C0 + CB ⋅ (T + I ) l

• • • • •
ME 6222: Manufacturing Processes and Systems Prof. J.S. Colton

Co = machine tool purchase cost l = machine life in years CB = book value of machine T = taxes and insurance rate I = interest rate
ME 6222: Manufacturing Processes and Systems Prof. J.S. Colton

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Accounting Convention
• Taxes, insurance, and interest assessed at the end of the year on the value at the beginning of the year.
ø ÷ ö è ç æ

Average Costs
• Average tax, insurance, and interest rates over the life of the machine.
û ú ù
ø ÷ ö
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• A = age of machine
ME 6222: Manufacturing Processes and Systems Prof. J.S. Colton

• TA = average annual tax and insurance rate • IA = average annual interest rate
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ME 6222: Manufacturing Processes and Systems Prof. J.S. Colton

è ç æ

ø ÷ ö

è ç æ

C f = Co ⋅

û ú ù

1 A −1 ⋅ (T + I ) + 1− l l

TA =

T l +1 ⋅ l 2

ë ê é

C f = Co ⋅

1 + TA + I A l
IA =

I l +1 ⋅ l 2

ë ê é

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J.Annual direct costs per year (Cd) • Attributable to a particular operation: – labor – materials – power – set-up Indirect (or Overhead) costs • Machine maintenance • Material handling • Engineering • Inspection • Office help • Administration • Building costs – – – – – – – depreciation interest taxes insurance heat light ventilation • We’ll look at later. Colton Machining Cost (Cm) Cm = tm x Rm • tm = machining time • Rm = fully burdened labor rate = Lm x (1+Bm) • L = labor rate • B = burden rate 11 ME 6222: Manufacturing Processes and Systems Prof. Colton 9 10 Machine operation cost per piece (Cp) Single point tool • • • • • • Cp = Cm + Ci + Cs + Cc + Cg + Cr Cm = machining cost Ci = idle cost Cs = set-up cost Cc = tool changing cost Cg = tool and regrinding costs Cr = raw material cost ME 6222: Manufacturing Processes and Systems Prof. Colton 12 2 . J. è ç æ Hourly machine costs (CH) ø ÷ ö CH = • • • • Co ⋅ [D + TA + I A + M A ] + n ⋅ L ⋅ (1 + B ) H H = hours of use per year D = annual depreciation (= 1/l) MA = average annual maintenance rate n = number of operators per machine ME 6222: Manufacturing Processes and Systems Prof. J. J.S. Colton ME 6222: Manufacturing Processes and Systems Prof. Colton 8 Indirect (or Overhead) costs • Handled as a percentage (B) of direct costs.S.S.S. ME 6222: Manufacturing Processes and Systems Prof.S. J. Colton 7 ME 6222: Manufacturing Processes and Systems Prof. J.S.

Cr = CM = [Part weight + Scrap weight x (1-S)] x Cost/weight S is the “salvage” value of the scrap ME 6222: Manufacturing Processes and Systems Prof. Colton 15 ME 6222: Manufacturing Processes and Systems Prof. unloading.S. ME 6222: Manufacturing Processes and Systems Prof. feeds.S. Colton 14 Tool changing cost (Cc) Cc = tc x Rm x (tm / T) • tc = tool changing time • tm = machining time per piece • T = tool life Tool and regrinding costs (Cg) Cg = [tg x Rg + Dg] x (tm/T) • tg = tool regrind time • Rg = fully burdened regrind labor rate = Lg x (1+Bg) • Dg = cost per tool edge – regrind = tool cost ÷ # permissible regrinds – insert = tool cost ÷ # edges ME 6222: Manufacturing Processes and Systems Prof. etc. Colton Set-up cost (Cs) Cs = ts x Rs / Ns • ts = set-up time • Rs = fully burdened set-up labor rate = Ls x (1+Bs) • Ns = number of pieces made per set up 13 ME 6222: Manufacturing Processes and Systems Prof. J.Idle cost (Ci) Ci = ti x Rm • ti = idle time/piece • loading. Colton Total cost per piece (Cp) Cp = tm x Rm + ti x Rm + ts x Rs/Ns + tc x Rm x (tm/T) + [tg x Rg + Dg] x (tm/T) + Cr 17 ME 6222: Manufacturing Processes and Systems Prof. J.S. J. personal breaks. J.S. Colton 16 Raw material cost (Cr) • We saw how to handle it in the economics module.S. Colton 18 3 .S. J. adjusting speeds. J.

S. Colton Minimum cost tool life (Tcm) tc ⋅ Rm + t g ⋅ Rg + Dg 1 −1 ⋅ n Rm ø ÷ ö Production time (tp) tp = tm + ti + ts/Ns + tc x (tm/T) • Note: tool regrinding and material costs do not contribute time.S. Colton 23 ME 6222: Manufacturing Processes and Systems Prof. J. J. J. è ç æ Tcm = ( ) ME 6222: Manufacturing Processes and Systems Prof.S.S. J.Machining time (tm) Cp = Cost per piece (Cp) ø ÷ ÷ ö + ts ⋅ + tc ⋅ Rm ⋅ + tg ⋅ R g + D g ⋅ ME 6222: Manufacturing Processes and Systems Prof. Colton Minimum cost cutting velocity (Vcm) ∂V 2 ñ • Calculate Vcm = ∂C p ∂V =0 n C ⋅ Rm 21 ME 6222: Manufacturing Processes and Systems Prof. Colton Optimization • Vcm = cutting velocity for the minimum cost per piece • Tcm = tool life for minimum cost per piece or • Vtm = cutting velocity for maximum production rate • Ttm = tool life for maximum production rate ME 6222: Manufacturing Processes and Systems Prof. Colton 19 ME 6222: Manufacturing Processes and Systems Prof. J.S. J. Colton û ú ù 1 − 1 ⋅ tc ⋅ Rm + t g ⋅ Rg + Dg n ø ÷ ö ( π [ ] ⋅ L ⋅ D ave ⋅ V 12 ⋅ f ⋅ C 1 n ∂ 2C p 0 ) ø ÷ ÷ ÷ ÷ ö è ç ç ç ç æ • • • • L = axial length of cut f = feed rate [ipr] N = V/πDave [rpm] VTn = C π ø ÷ ÷ ö Rs Ns ⋅ L ⋅ D ave ⋅ V 12 ⋅ f ⋅ C 1 −1 n 1 n + Cr n ø ÷ ÷ ÷ ÷ ö è ç ç ç ç æ èë çê æé è ç ç æ tm = L/fN π è ç ç æ • For a turning operation: ⋅ L ⋅ D ave ⋅ V 12 f −1 ⋅ Rm + ti ⋅ Rm 1 −1 n 20 22 24 4 .S.

S.S.25/edge ME 6222: Manufacturing Processes and Systems Prof. f are typically discrete. J.1 ø ÷ ö 0. 1-4 Vcm = 175 ⋅ (0. Colton Cutting cost .15)) / 60 = $0.466/min • tc = 2 mins • tg = 3 mins • Rg = (10. Colton 26 Cutting cost .Maximum production rate (minimum production time) ∂V C û ú ù Note: • S (V). J.S. J.Ex.2)) / 60 = $0.75 • Number of regrinds per tool = 15 • tg = 3 mins • tc = 2 mins • VT0.00 (1+1. 1-3 • Rm = (13.1 = 131 sfpm 29 ME 6222: Manufacturing Processes and Systems Prof.25) 0.S.1 1 − 1 ⋅ (2 ⋅ 0.S. determine the velocity for the minimum cost (Vcm) and for the maximum production rate (Vtm) per piece using a HSS tool. variables.466 + 3 ⋅ 0. Colton Cutting cost .Ex. J.S.00 (1+1.1 0.008 ipr d = 0.Ex.1 30 5 . 1-2 f = 0. Colton û ú ù ø ÷ ö èë çê æé ø ÷ ö è ç æ Vtm = èë çê æé Ttm = ñ • Calculate ∂t p =0 ∂ 2t p 0 1 − 1 ⋅ tc n 25 ME 6222: Manufacturing Processes and Systems Prof.075” Lm = $13/hr Bm = 115% Lg = $10/hr Bg = 120% Tool cost = $3. J.466)0.5 mins/part 28 ME 6222: Manufacturing Processes and Systems Prof. not continuous.75/15 = $0.1 = 175 – V = ft/min – T = min • ti = 1. J. • • • • • • • 27 ME 6222: Manufacturing Processes and Systems Prof.366/min • Dg = 3. Colton = 120 sfpm Vtm = èë çê æé 175 û ú ù 1 −1 ⋅2 0.Ex.366 + 0. 1-1 For the following cut. Colton Cutting cost . ∂V 2 1 − 1 ⋅ tc n ø ÷ ö n ME 6222: Manufacturing Processes and Systems Prof.

3125/edge Cutting cost .2 û ú ù 32 34 36 1 − 1 ⋅ (0.S.2 = 283 sfpm Vtm = èë çê æé 31 400 û ú ù 1 − 1 ⋅ 0.Cutting cost .S.S.Ex.Ex.83 mins ME 6222: Manufacturing Processes and Systems Prof.2 0. Colton Cutting cost . 3-2 • For HSS tool: • N = 12V / πDave = 12 x 120 / 2. J. 2-1 Suppose now you are using a carbide insert with 8 edges.2 ø ÷ ö 0.50. J.S.50/8 = $0.5π = 183 rpm • (T)0.466 + 0.75 0 .5 mins – check • tm = L/fN = 10/(0. Colton ME 6222: Manufacturing Processes and Systems Prof.466) / (0. 2-2 Vcm = ø ÷ ö èë çê æé 400 ⋅ (0.Ex. Colton ME 6222: Manufacturing Processes and Systems Prof.466 )0.008 x 183 x 43. 2-3 • HSS: – Vcm = 120 sfpm – Vtm = 131 sfpm Cutting cost . Do again.Ex. Colton 6 .05 Dave (workpiece diameter) = 2.Ex. J. 3-1 Now calculate the minimum costs for both previous cases.1 = 175 / V = 175 / 120 • T = 43.5 x 0.S.75 min VT0.Ex.1463 35 ME 6222: Manufacturing Processes and Systems Prof.2 = 321sfpm ME 6222: Manufacturing Processes and Systems Prof. J.S.366/min Dg = $2. J.466 = $0.85 Cs (setup cost/piece) = $0. • • • • • • tc = 0.2 = 400 Rm = $0. J.008 x 183)= 6.75 ⋅ 0.466 x 10) / (0. Colton Cutting cost .008 x 183) = $3.5” L (length of cut) = 10” ME 6222: Manufacturing Processes and Systems Prof.466/min tg = 0 Rg = $0.3125 ) 0.5) = $0. • • • • 33 • Carbide – Vcm = 283 sfpm – Vtm = 321 sfpm Cr (material cost/piece) = $0. that costs $2. 3-3 • Ci = tiRm = 1.1831 • Cc = tcRm (tm/T) = (2 x 0. Colton Cutting cost .6990 • Cm = tmRm = LRm / fN =(10 x 0.

14 / piece 37 ME 6222: Manufacturing Processes and Systems Prof.S.366 + 0.S.64) = $0.1793 • Cg = (2.05 + 0.5)] = $0.S. Colton 40 Cutting cost . J.75 x 0.5π = 432 rpm • T0. Colton 39 ME 6222: Manufacturing Processes and Systems Prof.1463 + 0.008 x 432 x 5.2117 • Cs = $0.89 mins • Cm = 10 X 0. Colton Cutting cost .85 ME 6222: Manufacturing Processes and Systems Prof.3484 ME 6222: Manufacturing Processes and Systems Prof.Ex. 3-7 • N = 12 x 283 / 2. J.Ex. J. 3-5 • Cp = 0.S.05 + 0. 3-9 • Cp = 0. J.S.008 x 432) = $1.2117 + 0.6990 + 3.64 mins – check • tm = L/fN = 10/(0.Ex. 3-6 For the carbide insert: – only Cm.5/8) x 10 / (0.1793 + 0.008 x 432 x 5.3484 + 0. Colton 41 ME 6222: Manufacturing Processes and Systems Prof.85 = $5.1603 Cutting cost .1831 + 0. Colton 38 Cutting cost .25] x [10 / (0.05 • Cr = $0.6990 + 1. Colton 42 7 .64) = $0.Ex. 3-8 • Cc = 0.1603 + 0.2 = 400 / 283 T= 5. Cc and Cg differ Cutting cost .Ex.008*432)= 2. 3-4 • Cg = [tgRg+Dg](tm/T) = [3 x 0.85 = $3.Ex.466 / (0.Cutting cost .S. J.008 x 183 x 43.466 x 10 / (0.29 / piece ME 6222: Manufacturing Processes and Systems Prof. J.

S. J. can you make enough parts to meet demand? or do you need to add shifts or equipment? Cutting cost – Ex. Colton Cutting cost .05 0.1831 0.Ex.29 / piece • Note: HSS has – higher Cm ($3.2117 0. Colton Cutting cost . • But.699 0.9125 0.14 Carbide Vcm Vtm 432 490 5. Colton 48 8 . J.1793) – higher Cg ($0.1463 0.Ex.S. J.35 44 ME 6222: Manufacturing Processes and Systems Prof. J.2117 vs.05 0.85 5.2657 0.3484 1.05 0.85 5.3484) – lower Cc ($0.1793 0.S. 3-12 • So.2972 0.699 0.4655 0.Ex.1603) ME 6222: Manufacturing Processes and Systems Prof.1 2.S. 3-13 • Process is discrete – fractions of a cut are lost in terms of time and cost • So what to do with lost tool cutting time? – ignore – add into cost • distribute over whole cuts / tool ME 6222: Manufacturing Processes and Systems Prof.699 0.18313 vs. rather than maximize the production rate.699 0. J.1603 0. Colton 46 Summary • • • • • Machine operation costs Single point turning costs Shop practice Economic lot size Equipment replacement ME 6222: Manufacturing Processes and Systems Prof. 3-11 HSS Vcm N (rpm) T (min) Cm Cc Cg Ci Cs Cr Total ($) 43 Vtm 200 18. $0.29 3.S.S. J.05 0.30 183 43.1888 0.5 3. $0.85 3.1463 vs.Cutting cost . $1. Colton 47 ME 6222: Manufacturing Processes and Systems Prof. one should minimize the cost per part. Colton 45 ME 6222: Manufacturing Processes and Systems Prof.85 0. 3-10 • Cp(HSS) = $5.14 / piece • Cp(carbide) = $3.64 3 1.3218 0.