In all of these cases, there are two important ingredients that must be present to maximize your success:ġ. The failure of your estimating process would be that you don’t bid enough jobs, your bids are too high so you don’t win enough jobs, or perhaps worst of all, you get locked into an unprofitable job by bidding too low. The failure of a “good enough” estimating process will be that your profit margin is less than it could be, and that it will be expensive to redesign your product or manufacturing process to recover that margin.įor a Job Shop, “Good” will entail an ability to do the estimates quickly enough that you can bid a lot of jobs and good enough that you are competitive against other bidders and can still make a profit on the jobs. “Good” can be measured along a variety of dimensions.įor an OEM, “Good” will be the ability to estimate accurately enough and quickly enough so that you can iterate on the estimating and design process until you have a product and a manufacturing process that produce a good enough profit margin for you. ![]() A key question to understand is how good you need to be at quoting and cost estimation. ![]() Whether you are manufacturing your own product to sell, or you are with a Job Shop that needs to manufacture parts for others, you will need to be able to estimate the costs associated with manufacturing the parts. Machining & Manufacturing Cost Estimation, Quotes, and Rates Introduction: Why Cost Estimation is so Important
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