Budgeting, Costing and Estimating for the Injection Moulding Industry

  • ID: 837104
  • Book
  • Smithers Information Ltd
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These topics are the source of much confusion in the plastics industry and from the research carried out by the author, there does not appear to be any kind of authoritative published work that addresses these topics. This book addresses these topics head-on to explain in detail all the stages involved from budgeting to the final estimate.

This book discusses and defines the different methods of budgeting, costing and estimating that are normally used within the injection moulding industry. In order to establish the costing system, the operating costs first have to be identified and quantified by means of a budget. Based on the budget, a costing system can then be developed that can be applied to determine the manufacturing cost of each product a company manufactures.

The underlying theme of this book is the maximisation of profits through the control of costs. Hence, emphasis is placed on ensuring the understanding of costing and estimating models through discussion and examples.

This book will be of considerable value to managers of injection moulding companies, to Accountants who work in these companies and users of the equipment who may have to some of the costing and budgeting for new projects.
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1. Terms and Definitions
1.1 Injection Moulding
1.1.1 Customer
1.1.2 In House
1.1.3 Moulder
1.1.4 Toolmaker
1.1.5 Mould, Tool and Mould Tool
1.2 Costing Terminology
1.2.1 Capital Costs
1.2.2 Depreciation Straight-line Basis Reducing-balance Basis
1.2.3 Book Value (or Present Value
1.2.4 Utilisation
1.2.5 Utilisation Factor (UF)
1.2.6 Efficiency Factor (EF)
1.3 Accountancy Terminology
1.3.1 Assets Fixed Assets Current Assets
1.3.2 Capital Employed
1.3.3 Direct Costs
1.3.4 Fixed Costs
1.3.5 Indirect Costs
1.3.6 Variable Costs
1.3.7 Turnover
1.3.8 Profit
1.3.9 Loss
1.3.10 Return on Investment (ROI

2. Planning and Budgeting
2.1 Planning
2.1.1 Long-term Planning
2.1.2 Medium-term Planning
2.1.3 Short-term Planning
2.1.4 Discussion
2.1.5 Planning for the Injection Moulding Industry
2.2 Forecasting
2.3 Budgeting
2.3.1 Budget Revisions
2.4 Budgets for Injection Moulding
2.4.1 Material Shrinkage
2.4.2 Flow Behaviour
2.4.3 Observation
2.5 Preparing a Budget for an Injection Moulding Operation
2.5.1 Long-term Planning (Years 5 to 10)
2.5.2 Medium-term Planning (Years 2 to 5)
2.5.3 Short-term Planning (Forthcoming Year)
2.5.4 Working Budget

3. Methods of Costing
3.1 Standard Costing
3.2 Absorption Costing
3.2.1 Steps in Introducing an Absorption Costing System
3.2.2 Absorption Rate Percentage of the Selling Price Rate Per Unit Percentage of the Manufacturing Cost
3.3 Marginal Costing
3.4 Machine Hourly Rates
3.4.1 Computation of the MHR Capital Cost Method Machine Lock Method Book Value Method (or Depreciation Method) kVA Rating Method
3.4.2 Selecting the Best Method Capital Cost Method Machine Lock Method Book Value Method kVA Rating Method
3.5 Adjusting the MHR
3.5.1 Normal Difficulty Work Mix
3.5.2 Varied Difficulty Work Mix
3.6 Discussion
3.6.1 Varying MHR System
3.6.2 Observation
3.7 Checking the Calculated MHR
3.8 Observation
3.9 Summary
3.9.1 Standard Costing
3.9.2 Absorption Costing
3.9.3 Marginal Costing
3.9.4 Machine Hourly Rate
3.10 Combined Costing Systems

4. Job Costing
4.1 Discussion
4.2 Job Costing for Trade and Custom Moulding
4.2.1 Stage A Machine-based Operations Materials Assembly Operations Support Services
4.2.2 Stage B
4.2.3 Stage C
4.2.4 Stage D
4.2.5 Stages E and F
4.2.6 Stage G
4.3 Job Costing for Trade/Custom Moulding
4.3.1 Supplementary Notes

5. Overlooked Costs
5.1 Introduction
5.1.1 Poor Electrical Power Factor
5.1.2 Rejects Occurring During Production
5.1.3 Material Spillages
5.1.4 Failure to Identify Difficult Work
5.1.5 Excessive Breakdowns of Plant
5.1.6 Repairs to Plant and Equipment
5.1.7 Repairs to Tools, Jigs and Dies (Tooling)
5.1.8 Poor Housekeeping
5.1.9 Overtime
5.1.10 Tooling Changes, Colour Changing and Purging Non-productive Machine Time Material Costs Technician Costs Use of Reprocessed Materials Material Contamination Running Production on Machines Rated at a Higher MHR Cost

6. Controlling the Costs: Measuring the True Cost of a job
6.1 Discussion
6.2 The Core System
6.2.1 Material Cost
6.2.2 The Machine Cycle
6.2.3 Machine Time Used
6.2.4 Production Rate
6.2.5 Secondary Production Processes
6.2.6 Delivery and Packaging Costs
6.3 Discussion
6.4 Monitoring Procedures
6.4.1 In-production Monitoring
6.4.2 Post-production Monitoring
6.4.3 Global Monitoring
6.5 Observations
6.6 Summary
6.7 Material Usage Factor
6.7.1 Discussion
6.7.2 In-production Monitoring of Material Usage
6.7.3 Post-production Monitoring
6.7.4 Global Monitoring
6.7.5 Remedial Action In-production and/or Post-production Check Negative Global Monitoring Check Negative
6.8 Observations
6.9 Summary

7. Reducing the Costs of Production
7.1 Discussion
7.2 The Cost of Producing Scrap
7.2.1 Mould Related
7.2.2 Machine Related
7.2.3 Post-moulding Operations
7.2.4 Housekeeping
7.3 Discussion
7.4 Observations
7.5 Discussion
7.6 Observations
7.7 Summary
7.8 Reducing the Material Cost
7.9 Cost Reduction Techniques
7.9.1 Wastage
7.9.2 Rejects
7.9.3 Just-in-Time (JIT) Techniques
7.9.4 Reducing the Shot Weight
7.9.5 Use of Reprocessed Material
7.10 Reduction of Part Volumes
7.10.1 Large Diameter (Cavity Size)
7.10.2 Smaller Diameter (Core Size)
7.10.3 Depth
7.10.4 Calculating the Saving in Material
7.10.5 Procedure Summary For Cavities For Cores
7.11 Summary
7.12 Effect of Blanking Off Impressions
7.12.1 Cycle Required to Achieve Original Profit Level
7.12.2 Cycle Required to Break Even
7.12.3 Observations
7.12.4 Summary
7.13 Effect of Processing Parameters
7.13.1 Discussion Original Cost Estimate Experience Information Provided Discussion Screw Forward Time Injection Speed Screw Back Phase Melt Temperature Cooling Phase Summary

8. Maximum Metal Conditions and Operating Windows
8.1 Maximum Metal Conditions
8.2 MMC Techniques
8.2.1 Applying MMC to Cavity Dimensions
8.2.2 Summary
8.3 Using MMC to Minimise the Moulding Weight
8.3.1 Observations
8.3.2 Summary
8.4 Achieving a Wide Operating Window (WOW)
8.4.1 Discussion
8.4.2 Factors Contributing to Narrow Operating Windows Mould Design Mould Construction Runner and Gate Geometry Cavity and Core Sizes Cooling System Materia Discussion Observations
8.5 Achieving a Wide Operating Window
8.5.1 Mould Appraisal
8.5.2 Sampling Procedures
8.5.3 Using MMC
8.5.4 Control
8.5.5 Summary

9. The Cooling Cycle and Its Effect on Cost
9.1 Cooling Cycle
9.1.1 Safe Ejection
9.1.2 Minimising the Cooling Phase
9.1.3 Observation
9.2 Elements of Mould Temperature Control
9.2.1 Amorphous Materials
9.2.2 Semi-crystalline Materials
9.3 General Principles for Efficient Cooling
9.3.1 Observation
9.4 Enthalpy Curves
9.5 Calculating Water Channel Sizes
9.6 Summary

10. The Loss Leader
10.1 Discussion
10.2 Intentional Loss Leader Policy
10.3 Unintentional Loss Leader
10.4 Discussion
10.5 Under-priced Jobs
10.6 Observations
10.7 Summary

11. The Estimating Function
11.1 Background Required
11.1.1 Plastic Material Properties
11.1.2 Toolmaking
11.1.3 Injection Moulding
11.1.4 Mould Design Two-plate Cold Runner Tool Hot Runner Mould Three-plate Tools Stack Moulds Mechanical Engineering Basic Physics Basic Electronics Robotics Moulding Machine Specifications Understanding Engineering Drawings Costing Techniques Jigs and Fixtures Packaging Delivery Methods

12. The Estimating Procedure
12.1 Information Required
12.1.1 Estimating Checklist Engineering Drawing Part Suitability Materials Compounded Materials Material Drying Material Colour Material Additives Part Function Tolerances Finishes Number of Parts Required Number of Impressions Type of Mould Tool Machine Cycle Shot Weight Machine Requirements Gating Mould Split Lines Ejection Robotics Inserts Inspection/Quality Assurance Secondary Operations Packaging Delivery
12.2 Using the Right Number of Impressions
12.2.1 Quality versus Quantity
12.2.2 Appearance
12.2.3 Part Geometry
12.2.4 Drawing Tolerances
12.2.5 Discussion
12.2.6 Summary

13. Estimating a Typical Job
13.1 Estimate Example
13.1.1 The Enquiry
13.1.2 Initial Evaluation Stage 1: Split Line Options Stage 2: Gating Options Stage 3: Ejection Options Stage 4: Resolving Outstanding Queries Stage 5: Customer Response Stage 6: Number of Impressions Stage 7: Mould Layout Stage 8: Calculating Material Weights Stage 9: Calculating the Projected Area Stage 10: Calculating the Locking Force Stage 11: Selecting the Machine Stage 12: Cycle Time Stage 13: Final Costing and Estimate

14. Estimating Mould Tool Costs
14.1 Universal Mould Costing Programs
14.1.1 Geographical Location
14.1.2 Work Loading
14.1.3 Plant Available General Trade Moulding Market Custom Moulding Market Specialist Moulding Market
14.1.4 Customer Payment History
14.1.5 Caution with New Customers
14.1.6 Unfamiliar Mould Designs
14.1.7 Degree of Difficulty
14.1.8 Time Available to Process Enquiries
14.1.9 Special Finishes
14.1.10 Number of Impressions
14.1.11 Size of the Mould
14.1.12 Conclusion
14.2 Custom-designed Mould Estimating Programs

15. Profit and Loss Accounts
15.1 Running Profit and Loss Account
15.1.1 Statutory Profit and Loss Statement
15.1.2 Trading Profit and Loss Statement
15.1.3 Profit and Loss Statement with Budgeted and Actual Results
15.1.4 Running Profit and Loss Account: April 2007
15.2 Observations
15.3 Summary

Glossary of Moulding Terminology
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