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Ask the Experts

December 12, 2011 - Updated
December 12, 2011 - Originally Posted

Benchmark Price for Contract Assembly

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

O. C.

Expert Panel Responses

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 avalue of $220,000 dollars. (Chip Shooter) This machine could place a little more than 9 components in onesecond. At 0.0016 per component you would make $0.0144 dollars per secondor 0.864 dollars per minute or $51.84 dollars per hour. If your burden factor (what it cost you per hour to keep yoursdoors open) is at $125.00 this does not seem to be a wise choice to accept thetask offered. Your burden factor, materials cost if any and thru-put rate forthe whole process will set the price on the services.

Terry Jeglum
President/CEO, 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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