Cost price calculation based on a Greenfield analysis

Oosterbaan, Maarten (2007) Cost price calculation based on a Greenfield analysis.

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Abstract:The composite parts made from CFRTP offer a good opportunity for Stork Fokker AESP to position themselves as a partner for their respective costumers. It also provides these costumers with a product that they are looking for: light weight, durability and strength. Stork Fokker AESP can offer this product when they start a separate factory for the production of these beams or they can choose to produce them within the current Stork Fokker AESP organization. For this separate factory option a cost price is calculated. This is done on a Greenfield basis, in essence starting with a green field and building the factory from the ground up. The production process is analyzed and all different production steps are identified. The cost are divided in capital cost and activity cost. For every production step these cost are calculated for one beam and for a ship set of beams. Furthermore the overhead costs are calculated on a price per beam and per s/s basis. The cost price is based on information provided by Fokker on the production process, up to date information on material costs, labour cost, real-estate cost and offers for machinery. The thesis is concluded with an overview of a number of possible locations for the factory. These are scored on a selection of criteria (reachable of the road, availability of personnel etc.), which give a limited view on which location is more or less suitable. Based on these criteria China looks like the best choice, however the raw materials comprise a large part of the cost price (52 percent). Cheap labor is therefore not top priority. The author concludes that building a separate Stork Fokker Beams factory should provide the Stork Fokker organization with a better chance than keeping it inside the current structure, on the basis of cost (lower overhead) and production facilities (no room at the current facilities).
Item Type:Essay (Master)
Clients:
Stork Fokker AESP, Papendrecht
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Industrial Engineering and Management MSc (60029)
Link to this item:http://purl.utwente.nl/essays/59243
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