Printing Estimating and Costs
Printing Estimating and Costs GCM 414
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This 11 page Class Notes was uploaded by Brant O'Reilly on Sunday October 11, 2015. The Class Notes belongs to GCM 414 at Eastern Kentucky University taught by Marlow Marchant in Fall. Since its upload, it has received 33 views. For similar materials see /class/221445/gcm-414-eastern-kentucky-university in Communication Studies at Eastern Kentucky University.
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Date Created: 10/11/15
Marlow Marchant PhD Devclo ping 3 Cost Estimating System 4 G CM 4 l 4 Printing Estimating and Costs Technology Department Copyright 2009 Eastern Kentucky University Costs 39 Costs are a complex part of any business and understanding them is essential to the survival of the organization 39 You cannot manage What you cannot measure 39 A company needs cost champions people in the plant with a burning passion for monitoring and communicating the cost components ofthe company on a constant basis Budgeted Hourly Rate System 39 All MIS systems serving the printingindustry provide their version of BHR cost recovery 39 This system has two components 39 BHRs for each cost center 39 Standard Production data 39 A cost center is aworking area in the plant Where production activities are completed on a printing job 39 Such as a printing press or a electronic design station 4 39 The company must identify all the production components or activities performed in the cost center 3 Production Standards 0 O O O Hourly such as 21 hours 39 01 6minutes Standards are based on the average output of a cost center The more e icient a cost center the more manufacturing costs can be reduced and the greater the competitive advantage for the comp any Product standardizationis the development of a group of products or a product line that has signi cant common elements yet unique characteristics The greater the pro duct standardization the greater the competitive advantage for the company Rules for Establishing BHRs 39 l 7 Divide production areas into speci c centers 39 Includes the square footage 39 2 7 Tailor all data to the company s production conditions 39 3 7 Review and revise standards at least once a year 39 Reasons for immediate BHR revisions 39 Equipment is added or replaced 39 Peripherals are added to existing equipment 39 Software changes 39 Employee costs change Plant layout is revised Rules for Establishing BHRs 39 4 7 Keep all data written and secure 5 7 Share informationwith employees on a need to know basis Establishing Production Standards 39 Methods 39 l 7 Collection and review ofhistorical Plant data 39 Best method 39 2 7 Standards based on intuition 3 7 Standards based on Publishing information 39 Regional PIA af liates publish standards 39 4 7 Standards borrowed from the competition 5 7 Standards based on equipment manufacturers data 39 6 7 Standards based on Plant engineering evaluation Time and motion studies 7 Developing BHRs 39 Standard Production Time X BH R Material Costs Buyouts Costs Estimated cost to produce the job 39 It is veryimportant that the BHRs are developed from cost gures of each printing plant 39 Review Ruggles spreadsheet starting on paper 59 Productivity Percents 39 100 productivityis impossible 39 Normally used 80 70 or 60 percent 39 From a 40 hourworkweek 70 productivitywould equal 28 chargeable hours 39 The higher the productivity percent the lower the BHR and higher competitive advantage for the company Overtime vs Additional Shifts 39 One guideline that is sometimes used is that when overtime consistently approaches 40 of the straight time hours worked a complete new shift should he considered 39 Considerations 39 Additional shifts save the company money by reducing overtime and spreading xed costs 39 Increase signi cantly the volume of work However with the volume holdup or is it temporary or seasonal 39 Normally employees do not want to work 2nd or 3rd shift 39 Equipment will we arout faster BHR rate signi cantlylowers Cost Markups O 0 Cost markup is an additional dollar amount included in the overall cost of a job for any material or buyouts It is normally a percent that is added to the cost charged by the seller There are real costs incurred With buying anything from out sided the comp any The printer should strive to carefully establish the markup percentage so that it re ects only reals costs and not used it as additional pro t