CE and Batch pricing difference

[Forrest Chapman]

Hello to All,

I'm curious as to why there would be a cost difference between the batch file and individual files. For instance take 5 cabinets of all the same make and load them into the batch. Then take each cabinet into the editor and price individualy without changing the pricing parameters. Add them up and see that they come out less than the total in batch. This is without nesting them. Is this a glitch or just a different way of figuring?

Thanks,
Forrest

[DanEpps]

Pre-nest, prices are calculated on total square inches (sheet goods) without regard as to whether the parts will fit on a given number of sheets. Post-nest, it could be because parts from one cabinet will fit on a sheet with parts from another cabinet.

That's my best guess.

[Forrest Chapman]

Dan,

Thats just it. The cabinets in both are pricing different before nesting. Try it.

Forrest

[DanEpps]

I took a standard frameless base into CE and the Cost Sheet showed it to be $40.11 based solely on total square inches. This is with generic 3/4 at $45 and no labor or markup.

The same cabinet in Batch, before nesting was $45 before nesting and $90 after nesting. The expected yield is set to 100% so it uses a full sheet before nesting and 2 full sheets after.

This is normal because before nesting it is based only on total square inches without regard to yield or part placement on the sheet(s). In Cabinet Editor yield is not considered and in Batch the yield is taken into consideration before nesting. After nesting both yield and part placement is taken into consideration.

[Forrest Chapman]

Dan,

Thats the answer. Cabinet editor is not considering yield which I did not know. That is a bad thing since I price cabinets quite often in CE and expected it to allow for the % of yield. The next question I guess is why not?

Forrest

[DanEpps]

It cannot consider yield because until the job is nested, the part layout and number of sheets are unknown.

I've always thought having the Cost Sheet available in the Cabinet Editor was of no real use.

[Forrest Chapman]

Dan,

I don't see why It can't consider yield when yield is based on a % value that you apply. Example would be if you had a price based on 100 sq." of material with a 75% yield I would think it would figure on 125 sq." I haven't tested any of that yet but will try this afternoon.

Forrest

[DanEpps]

Actually after setting yield, it does take it into consideration when costing in the Cabinet Editor.

I set yield to 75% and loaded the same standard frameless base.

A 48x96 sheet contains 4608 square inches. The standard frameless base has 4107 square inches or, 89.13% of a full sheet.

With the price set at $45 per sheet, the unnested cost is $53.48 with the 75% yield clearly indicated ( I guess I just overlooked that before).

Now for the math:

.8913 * $45 = $40.11 (cost with 100% yield)
$40.11 / .75 = $53.48 Cost with 75% yield)

Remember, this cabinet after nesting produced a cost of $90 using a 100% yield. After nesting (with 75% yield) the cost was still $90! Why? Because it still uses two sheets.

After reading the help documentation, Estimated Yield is used before nesting and Actual Yield after. That explains why the unnested cost is $53.48 (75% yield) before nesting and $90 afterward.

So, the only time the Estimated Yield comes into play is before nesting.

Here is what the help documentation says:

The Cost Sheet report lists the quantity and cost of the materials needed to build the Job, plus the markups specified in the Define Markup Prices section of Settings/Preferences. Various cost markups, calculated profit and selling price are shown. This report can be generated from several areas and the result varies depending on the area where the report was created.

If the Cost Sheet is created while in the Cabinet/Assembly Editor, the resulting report is for the cabinet currently displayed. In calculating sheet material cost, the Estimated Yield for the material as specified in the Define Stock Materials section of Settings/Preferences is used.

If the Cost Sheet is created with one or more cabinets highlighted in Custom Layout, the resulting report is for the highlighted items only. In calculating sheet material cost, the Estimated Yield for the material as specified in the Define Stock Materials section of Settings/Preferences is used.

If the Cost Sheet is created with nothing highlighted in Custom Layout, or from any other area, the resulting report is for the entire Job. In calculating sheet material cost, the Estimated Yield for the material as specified in the Define Stock Materials section of Settings/Preferences is used provided the Job has not been previously nested. If the Job has been nested and no changes made since the nesting process, the actual yield for this Job is used. The yield used for the report is clearly shown on the report.

Material requirements in this report are determined by dividing the total area required by the yield, either the Estimated Yield specified in the Define Markup Prices or the actual yield if the nesting process has been completed.

There used to be a very long explanation of costs in the help documentation but this is all that I could find now. This is actually quite a bit clearer that earlier documentation.

[Forrest Chapman]

Thanks Dan,

I do however understand how its supposed to work but it has a discrepency between the 2 areas. I figured it used the same calculations in both areas (before nesting) however the price seems to nudge up in batch for some reason.

I'm going to have to play with this a little more.

Forrest

[DanEpps]

If you use this formula, there are no discrepancies.

(Full sheet square inches / total square inches) / ESTIMATED yield percentage = unnested cost with ESTIMATED yield

To get the nested price, simply multiply the total number of sheets by the per sheet cost.

Labor and markup also come into play but I have not included them in the formula above.

Here, I have set the following parameters:

Material cost (generic 3/4 sheet goods) = 45
Percent markup (sheet goods) = 10
Expected yield percent (sheet goods) = 75
Profit margin percent = 30
Shop hours labor cost = 50 (using labor based cost calculations)

Using a standard frameless base with Labor hours for cabinet = 1, the cost in the Cabinet Editor is as follows:

Sheet Stock
- Total area = 4107 square inches
- Total cost with 75% ESTIMATED yield = $53.48
- Percent markup 10% = $5.34
- Total cost with markups = $58.82

Labor Costs
- Shop hours 1hr @ $50 per hour = $50
- Total labor cost = $50

Profit markup non-catalog cabinets
- Percent markup 30% = $46.64

Selling price = $155.46 ($58.82 + $50 + $46.64)

Now to break that down...

We already have the materials only formula above, so use that.

Using the output from that formula and multiply it by the percent markup:

53.48 * .1 = $5.34
Add material cost, percent markup and fixed markup to get total material cost.
53.48 + 5.34 = $58.82

Add all labor costs to get total cost BEFORE profit is applied.
58.82 + 50 = $108.82

Add profit to get selling price.
108.82 + 46.64 = $155.46

After nesting, the same formula works. The difference you see in because you are now using ACTUAL instead of ESTIMATED yield.

Having gone through this exercise, I have a question for the Thermwood folks:

Just exactly how is percent profit markup being calculated? I cannot come up with the amount produced in the cost sheet.

[Kerry Fullington]

Dan,

That profit is calculated as Margin not a markup. If you want a 20% margin, instead of adding 20%, divide you figure by .8 and it will give you the margin.

Kerry

[DanEpps]

Dan,

That profit is calculated as Margin not a markup. If you want a 20% margin, instead of adding 20%, divide you figure by .8 and it will give you the margin.

Kerry

DOH!!! I knew that but my brain was still low on coffee.