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How do I increase throughput or performance?

This ROI calculator looks at what the cost savings would be if you could produce X number of parts more per day or per hour. The idea is that you’re producing more while also absorbing more of your fixed costs so each part costs a little less. Increase Throughput or Performance ROI Formula: (Gains – Costs)/Costs […]

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This ROI calculator looks at what the cost savings would be if you could produce X number of parts more per day or per hour. The idea is that you’re producing more while also absorbing more of your fixed costs so each part costs a little less.

Increase Throughput or Performance ROI Formula: (Gains – Costs)/Costs = ROI

Assumptions:

  • Cost to Run a Machine with Labor and Overhead: $80 per hour
  • Typical Parts Produced per Hour: 2
  • Software Cost per Day per Machine: $5.76

Increase Throughput or Performance ROI Calculation:

Labor and overhead cost per part: $80 / 2 = $40 If we increase the number of parts per hour to 2.5: $80 / 2.5 = $32 That is a savings of $12 per hour or $96 per day per machine.

($96 – $5.76)/$5.76 = 1,567% ROI

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