Material Estimating

Material estimating can be simple to complex depending on the particular job you are estimating.   Raw material is a commodity which could include metal sheets, wood, bars, plastic, plates, block of metal, etc.  These items are purchased from a supplier and are usually priced at a per unit weight price.

A few examples

1. When the raw material is priced as a per unit weight the estimated costs at the high level is

( Part Weight ) * (Price Per Unit Weight)

2. When the raw material is priced per unit. An example would be the supplier would price a 48 x 120 piece of plywood at $22.00

(Units Required) * (Price Per Unit)

3. The raw material may be priced per linear length, example wood be a tube would be priced at $2.00 per linear foot.

(Part Length) * (Linear Length Price)

The supplier would potentially have a Price Per Unit Weight, Price Per Unit or Linear Length Price that would fluctuate based on the quantity being purchased.  In this case the supplier would give prices as shown in the example

Weight           Price Per LB

0                       $1.00

1000               $0.80

5000               $0.65

10000             $0.61

 

As shown above you need to know the Part Weight, Unit Required and or Part Length.   Next you need to know the price that will be charged from the supplier and you will have the cost.

In the next blog entry the calculation of Part Weight will be discussed.

MIE Solutions provides software resources to help you manage your direct and indirect labor throughout the product life cycle from quoting and estimating, job costing to invoicing.

http://mie-solutions.com/mie/index.php/MIE-QuoteIt-Quoting-and-Estimating-Software/mie-quoteit.html

Author: MIE Solutions

David Ferguson has over 20 years of experience in the manufacturing and fabrication industry. David Ferguson has been to over 100 manufacturing companies helping and guiding them to be more efficient and cost effective. As a child in Junior High School David Ferguson found a passion for the early computer systems, which would drive much of his future work. David Ferguson created and sold his first computer program, Arrow Data Systems, which was an early CAD/CAM system for the Apple 2e Computer. In the late 1980's after seeing his father (a sheet metal manufacturer) come home many nights estimating, David Ferguson saw an opportunity to optimize his effort through computer technology. Shortly thereafter the FabriTRAK Production Control package was developed. The Quote It! estimating package was developed out of the FabriTRAK system to become one of the leading sheet metal estimating packages in the world. David Ferguson has always had a passion for developing software to make the manufacturing process simpler, faster and more efficient. Prior to founding MIE Solutions David Ferguson worked with his father at Alco Sheet Metal, METALSOFT Inc. and was a consultant at Toyota Motors Sales. David Ferguson has his Masters in Computer Science and Mathematics from California State University, Long Beach.

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