Sun Sep 11, 2011 10:33 am by CookieTheDog'sOwner
You could work the concept in on the cheap, sort of.
Have you ever ordered printed material in bulk. (I used to run the school newspaper, and my father was in politics and used to buy bumper stickers and signs and flyers in bulk, so that's where I'm coming from.) The printer charges you a flat "set up fee" for each job, and then a certain amount per unit, which possibly gets discounted once the run gets above a certain size. Let's say the set up fee for bumper stickers is $50, and the per unit printing cost is $0.05. 100 bumper stickers is $55, or $0.55 each. 200 is $60, or $0.30 each. 1,000 is $100, or $0.10 each. See what's happening? The bigger the press run, the cheaper the per unit cost gets because the set up fee gets spread out over more units.
You could do something similar with production costs. Let's say we have a plant capable of 100,000 engines per year. There would be a base charge imposed for each engine type the plant produces, plus a per unit charge for each engine. You could allocate that production capacity however you want, but if you build many different types, or build small lots, the per unit cost is higher than if you standardize on one design and build it in quantity. You could make it a little more sophisticated in that the base charge for a new engine design that's a modification of one you've produced before would be less than for a completely new design. I'm no programmer, but it seems to me that this concept wouldn't be too hard to work into the software.
Is this making sense?