Prokasta method

A B C D E
No. of types of special components per
motors 1 2 3 5 10

Pre-PROKASTA unit cost 304 304 304 304 304

Spcl components avg cost 40 40 40 40 40

Manufacturing costs 344 383 423 502 700

Order Size A B C D E

1 210.3 210.3 210.3 210.3 210.3

Order processing
5 42.1 42.1 42.1 42.1 42.1
cost for given no.
of orders
10 21.0 21.0 21.0 21.0 21.0

20 10.5 10.5 10.5 10.5 10.5

1 60.0 120.0 180.0 300.0 600.0

Special
5 12.0 24.0 36.0 60.0 120.0
components
requisition costs
10 6.0 12.0 18.0 30.0 60.0

20 3.0 6.0 9.0 15.0 30.0

1 613.9 713.5 813.1 1,012.3 1,510.3

Total per motor
5 397.7 449.3 500.9 604.1 862.1
cost for given no of
orders
10 370.6 416.2 461.8 553.0 781.0

20 357.1 399.7 442.3 527.5 740.5

 Pre-PROKASTA unit cost Special components calculations
Material 90 Material 12
Material related OH 5 Material- Related OH 0.7
Direct labour 35 Direct labour 4.5
Production-Related OH 117 Production-Related OH 15
Support related OH 57 Support-Related OH 7.4
Assumed avg cost of each special
Pre-PROKASTA unit cost 304 components 39.6

Order processing cost per order Special components handling

Total no. of orders in Total special components handling cost in
1987 65,625.00 1987 19,500,000.00
Total order processing Total no. of production orders and
cost in 1987 13,800,000.00 requistions for special components in 1987 325,000.00
Per order processing
cost 210.2857143 Handling cost per special components 60

Traditional method
A B C D E
No. of types of special
components per
motors 1 2 3 5 10
Cost of base motor 247 247 247 247 247
Spcl components avg
cost 32.2 64.4 96.6 161 322
Manufacturing cost 279.2 311.4 343.6 408 569
Support related OH 97.72 108.99 120.26 142.8 199.15

Order Size
1 376.92 420.39 463.86 550.8 768.15
Total per motor cost for 5 376.92 420.39 463.86 550.8 768.15
given no of orders 10 376.92 420.39 463.86 550.8 768.15
20 376.92 420.39 463.86 550.8 768.15

Cost of base motor Special components cost

Material 90 Material 12
Material related OH 5 Material- Related OH 0.7
Direct labour 35 Direct labour 4.5
Production-Related OH 117 Production-Related OH 15
Cost 247 Cost 32.2