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1973914 |
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#1
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Member ![]() ![]() Group: Members Posts: 353 Joined: 16-May 03 From: Washington, DC Member No.: 703 ![]() |
Anyone know where i can get a new set of CV's (all four) or a full axle without spending a fortune? Or at least can find them period?
Thanks! Bill |
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lapuwali |
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#2
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Not another one! ![]() ![]() ![]() ![]() Group: Benefactors Posts: 4,526 Joined: 1-March 04 From: San Mateo, CA Member No.: 1,743 ![]() ![]() |
Even with manufacturing new races, in the cheap country model we're making a profit of $30 per unit. More than enough to make new races for some percentage of the units. If 50% of the units require new races, we have to be able to make a race for $30 per unit to break even. At a $10/day labor rate for a skilled machinist in our cheap country (2x what the assembler makes, you'll remember), and assuming $10 in materials, that's $20 per unit if he makes only one per day. Plenty, and my estimates were deliberately very pessemistic. Still low but plausible numbers would be more like $1 for materials and 10 units if made on hand-run machinery, dropping cost to $2 per unit, which means our unit cost for the completed axle would be something like $15 instead of $13, and we're selling it for $50. Move the plant to Mexico and unit costs rise to $25. Move it to the US and they rise to maybe $40 (assuming automation).
My point is you cannot estimate costs by looking at how much a local craftsman would charge to make ONE of the same thing. Once a factory process is built up, costs fall dramatically, either because cheap semi-skilled labor is employed, or because of automation (so you can spread those costs over thousands of units). There are hundreds of examples of goods in US stores that would cost 10-1000x more to replicate as a one off than they cost when made by a dedicated factory. DVD players are now under $50 NEW at retail. How much would it cost to make ONE DVD player from scratch? Yet some significant number of factories are making them for $20 or less EACH. You tell me, what's more complex to make, a DVD player with hundreds of high-precision parts, or rebuilding an axle with less than a 20 parts total, none of which are particularly critical in tolerance or precision? And the DVD players are being made in relatively expensive places like Taiwan (GDP/capita of $23K/year, or only slightly below a Western European country), rather than Mexico, with a GDP/capita of only $9K/year. Or Bangladesh, at under $2K/year. My axle scenario is deliberately inflating prices to make a point. A good operation SHOULD be able to do the job for less money than it takes to make a DVD player, so assume $10 or less per unit. Meaning that $100 axle is marked up 10x from the manufacturer, so while you're complaining they couldn't possibly do a good job so cheaply, in reality, they're stealing you blind... |
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