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You are an experienced machinist with a small tool shop. You have been asked to submit a bid to produce 12 special clamps for a new die that is under construction. You estimate that the material costs (metal and fasteners) for each clamp are $150.00. You also estimate that 10.41 labor hours are needed to produce the first clamp. The value of your labor is $50/hour. From similar orders in the past, you estimate that there is a 90% learning curve for this type of work. Using this information, what is the lowest total bid (cumulative price for 12 clamps) you should submit if you charge a 25% markup on material and you wish to recoup your labor costs? From the last question.... You are an experienced machinist with a small tool shop. You have been asked to submit a bid to produce twelve (12) special clamps for a new die that is under construction. You estimate that the material costs (metal and fasteners) for each clamp are $150.00. You also estimate that 10.41 labor hours are needed to produce the first clamp. The value of your labor is $50/hour. Your potential customer is receptive to your bid from the previous question, but is hesitant tc award you the order because the average price per clamp that you bid is about 5% higher than their target price. You respond to the customer that if they would increase their order from 12 clamps to 22 clamps, you could beat his target price. What is your new total BID PRICE (meaning cumulative total price for 22 clamps)? Hint: set it up in Excel again (see video in Moodle). It is too hard to calculate by hand. Also, don't forget this is the average price per clamp so you need to total up the labor, material, material markup for x clamps and then divide by x.

You are an experienced machinist with a small tool shop. You have been asked to submit a bid to produce 12 special clamps for a new die that is under construction. You estimate that the material costs (metal and fasteners) for each clamp are $150.00. You also estimate that 10.41 labor hours are needed to produce the first clamp. The value of your labor is $50/hour. From similar orders in the past, you estimate that there is a 90% learning curve for this type of work. Using this information, what is the lowest total bid (cumulative price for 12 clamps) you should submit if you charge a 25% markup on material and you wish to recoup your labor costs? From the last question.... You are an experienced machinist with a small tool shop. You have been asked to submit a bid to produce twelve (12) special clamps for a new die that is under construction. You estimate that the material costs (metal and fasteners) for each clamp are $150.00. You also estimate that 10.41 labor hours are needed to produce the first clamp. The value of your labor is $50/hour. Your potential customer is receptive to your bid from the previous question, but is hesitant tc award you the order because the average price per clamp that you bid is about 5% higher than their target price. You respond to the customer that if they would increase their order from 12 clamps to 22 clamps, you could beat his target price. What is your new total BID PRICE (meaning cumulative total price for 22 clamps)? Hint: set it up in Excel again (see video in Moodle). It is too hard to calculate by hand. Also, don't forget this is the average price per clamp so you need to total up the labor, material, material markup for x clamps and then divide by x.

Marketing
Marketing
20th Edition
ISBN:9780357033791
Author:Pride, William M
Publisher:Pride, William M
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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You are an experienced machinist with a small tool shop. You have been asked to submit a bid to produce 12 special clamps for a new die that is under construction. You estimate that the material costs (metal and fasteners) for each clamp are $150.00. You also estimate that 10.41 labor hours are needed to produce the first clamp. The value of your labor is $50/hour. From similar orders in the past, you estimate that there is a 90% learning curve for this type of work. Using this information, what is the lowest total bid (cumulative price for 12 clamps) you should submit if you charge a 25% markup on material and you wish to recoup your labor costs? From the last question.... You are an experienced machinist with a small tool shop. You have been asked to submit a bid to produce twelve (12) special clamps for a new die that is under construction. You estimate that the material costs (metal and fasteners) for each clamp are $150.00. You also estimate that 10.41 labor hours are needed to produce the first clamp. The value of your labor is $50/hour. Your potential customer is receptive to your bid from the previous question, but is hesitant to award you the order because the average price per clamp that you bid is about 5% higher than their target price. You respond to the customer that if they would increase their order from 12 clamps to 22 clamps, you could beat his target price. What is your new total BID PRICE (meaning cumulative total price for 22 clamps)? Hint: set it up in Excel again (see video in Moodle). It is too hard to calculate by hand. Also, don't forget this is the average price per clamp so you need to total up the labor, material, material markup for x clamps and then divide by x.
Transcribed Image Text:You are an experienced machinist with a small tool shop. You have been asked to submit a bid to produce 12 special clamps for a new die that is under construction. You estimate that the material costs (metal and fasteners) for each clamp are $150.00. You also estimate that 10.41 labor hours are needed to produce the first clamp. The value of your labor is $50/hour. From similar orders in the past, you estimate that there is a 90% learning curve for this type of work. Using this information, what is the lowest total bid (cumulative price for 12 clamps) you should submit if you charge a 25% markup on material and you wish to recoup your labor costs? From the last question.... You are an experienced machinist with a small tool shop. You have been asked to submit a bid to produce twelve (12) special clamps for a new die that is under construction. You estimate that the material costs (metal and fasteners) for each clamp are $150.00. You also estimate that 10.41 labor hours are needed to produce the first clamp. The value of your labor is $50/hour. Your potential customer is receptive to your bid from the previous question, but is hesitant to award you the order because the average price per clamp that you bid is about 5% higher than their target price. You respond to the customer that if they would increase their order from 12 clamps to 22 clamps, you could beat his target price. What is your new total BID PRICE (meaning cumulative total price for 22 clamps)? Hint: set it up in Excel again (see video in Moodle). It is too hard to calculate by hand. Also, don't forget this is the average price per clamp so you need to total up the labor, material, material markup for x clamps and then divide by x.
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