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Topic: Job Shop forum / hourly rate

Page: 1

Posted: 10-10-2006 14:53 by Farrow
what should my hourly rate be on my laser.??????????????????
Posted: 10-10-2006 15:18 by Lfare
This is a more complex question than it seems.  We're in the US so the rates will be different due to cost differences, type of machine, etc.  Additionally, we do not have flat plate cutting.  Everything we do is multiple (up to six) axes.

We use activity based costing as best we can.  We've taken five key costs and allocated them to machine centers.  These costs are Labor, Gas, Electricity, Depreciation and Interest--this simply established the variability in cost per machine center.  Then we factored in overhead costs and distributed them by industry.  In the end, we have two key rates per machine center, with three different machine center costs.  The rates vary from $120/hour to $300/hour; the most common being $150.

A typical rate for C02 flat plate cutting in the Northeast US is $60 per hour.

I hope this helps.

Kip Brockmyre
Posted: 10-10-2006 15:32 by Farrow
we have a trumpf l2530 flat bed laser 3.2 kw i cant understand why some people can cut cheaper than me. we charge £120 an hour and £150 for nitrogen cutting.
Posted: 10-10-2006 15:51 by Microm1
As Kip said, this is a complicated question and imposible to answer on teh information given.


The costs that you atribute will have an effect.  Paying too much for the machine, servicing, electricity, gas, materials or labour will push up break even point.  Job shop group have surveys so that one can see how one is dooing agains others for this very reason.

Overheads also have an effect: paying too much, being too posh or taking too much out will apparently require high charge per hour.
The problem is that high cost per hour will result in lower sales.  The resultant downward spiral is inevitable.

There are three ways to price jobs. 
1) what it costs plus a bit
2) what the competition charges less a bit
3) what the customer expects and will pay

2 and 3 require that you organise the shop so that you DO make it for that (less a bit)
Posted: 11-10-2006 09:52 by Lpro
I deal with certain customers on a regular basis who insist on knowing what our charge out rate is. That single piece of information is absolutely useless without knowing how much work they get for their money. The hourly rate you need to charge (or can charge)depends on the capabilities of your machinery. A five year old machine is probably only 30% as efficient as a new one because of age related reducing efficiency and improvements in performance of the latest models. I have been laser cutting for twenty five years and when I started the charge out rate was £100, today, on occasions, we are charging less!
It probably isn't much help to you but it really is a case of'suck it and see'. Good luck.
PS. Further to the earlier reply I hope that I am well and truly retired before we are charging out at $60(£35) per hour.

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