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Unread 28-01-2007, 19:03
RoboCoach RoboCoach is offline
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Re: Innovation First- What gives?

Concerning all of this discussion about costs, I haven't seen anyone mention economies of scale. Building a handful of devices will be a lot more expensive than knowing 1500 or so are sure-sales.

Quote:
Let's take AndyMark.biz as an example. Their transmission are being sold at $330. I know a team in Florida who is making their own tranmission. Without any labor, each transmission parts come out to be $300. Has anyone tried to go out and make a custom transmission with out having the experience. I bet the cost of each transmission would come out to over $500 bucks a piece (including labor).
I'm sure this number would come down (including labor) considerably if they were to gear up for quanity production. Probably not down to 330$ (design variables notwithstanding), but as you can see, the potential savings are huge.

The consideration here is that this applies in other areas of the organization as well. This is not to necessairly comment one way or the other on the IFI pricing/cost structure, but to be something to keep in mind when trying to distill the numbers.
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