quoting quantities

[howecnc]

Does anyone have a system for quoting higher quantities?
I just did a job of 150 pieces. Now they want a thousand.
I know as quantity goes up price should come down.
I can't do the parts any faster and don't mind taking a hit in price.
How much cheaper should the part be at a higher quantity?

Thanks,

Chris

[tlagnhoj]

Does anyone have a system for quoting higher quantities?
I just did a job of 150 pieces. Now they want a thousand.
I know as quantity goes up price should come down.
I can't do the parts any faster and don't mind taking a hit in price.
How much cheaper should the part be at a higher quantity?

Thanks,

Chris

Chris,

I could actually write a book on this topic :-) Everyone likes to think that as quantities go up price should come down. Most of the time that is the case. But you have to look at more than quantity to know if that is practical or even possible.

First what resources do you have to put into meeting this larger order? If the time frame is long enough perhaps none... But if you have to extend the work day for paid labor maybe it would cost you so much to meet the clients request that you would have to RAISE the price to meet the commitment.

What kind of profit margin was there in doing 150 parts? If margins are thick enough you may be able to give back 5, 10 or even 15% without giving it a thought. However, if the margins are thin to start with, giving back 5% could suck the profit dry when an unexpected snag develops. What if they come back with a RFQ for 2,000 parts? Could you afford to give another break at that quantity?

Can you get a break on the materials for this larger order quantity? If yes that may be enough to give the customer what they need and keep your profit margin flat!

I know you said you can't make the parts any faster but is this really the case. Experience has tough me that it rarely is true. Processes can often be optimized. An extra few percent in feed rates and spindle speed... More efficient tooling for roughing... Optimizing tool paths... The list could go on for pages depending on the processes involved. The point being if you have made only 150 of these parts you have probably not gone to the wall to squeeze all of the efficiency you can from the processes involved.

This is a question every manufacturer of ANY product has had to deal with at some point. There is no magic formula. It depends on different factors in different markets. Who's to say that the first break wasn't at 100 pieces and the next break isn't at 2,000? Pricing can be a bit of an art more than an exact science.