price for profit
the total Average Labor Rate by a number.
In this method, we use a multiplier of 10 to help construct the Price List . This can be any number you wish, so if you feel that using 8 or 12 makes more sense for you, that’s OK. For the time being, leave it at 10. Opportunity Cost / Hour This is the Average Labor Rate amount in B5 multiplied by the factor in cell B7 . In our example, it is $350. We will be applying this number to use to create a value for the Downtime on the production floor. Remember, you are only making money when you are printing shirts.
By putting a value on this time and including it in our pricing, we can help offset those costs.
Opportunity Cost / Minute This is simply the calculation for our total Opportunity Cost is cell B9 divided by sixty minutes. We will use this information below. Shift Length / Minutes This is the total number of minutes that your production runs each day, not including breaks or lunch. In our example, we show 420 minutes. An eight hour shift with a thirty minute lunch and two fifteen minute breaks, totals seven hours. 7 x 60 = 420. Downtime % This is the average percentage of the production day spent not printing shirts. This includes Set Up time and also regular Downtime when there is a problem.
This is where using a daily Production Log and keeping track of the data comes in handy.
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