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December 12, 2011

Benchmark Price for Contract Assembly

We are a contract manufacturer. A customer wants to pay us $0.0016 per component on a new assembly. Is there a benchmark price per component for assembly services?

O. C.

Experts Comments

Let's say that there are 1600 components on the assy. Big PCB.

You are running a 35,000 per hour placement machine that has a value of $220,000 dollars. (Chip Shooter)

This machine could place a little more than 9 components in one second.

At 0.0016 per component you would make $0.0144 dollars per second or 0.864 dollars per minute or $51.84 dollars per hour.

If your burden factor (what it cost you per hour to keep yours doors open) is at $125.00 this does not seem to be a wise choice to accept the task offered.

Your burden factor, materials cost if any and thru-put rate for the whole process will set the price on the services.

Terry Jeglum
Electronic Technology Corporation
Mr. Jeglum has 35+ years experience and is the founder of Electronic Technology Corporation. He is responsible for 22 years of program management for the Company.
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