On 18/12/21 06:45, "Bruce Johnson" - johnson at Pharmacy.Arizona.EDU
(via tml list) wrote:
> Depends on how the contracting is structured, honestly. For example US
> DOD contracts for things like Aircraft are *supposed* to be “N
> Aircraft at $XX million per aircraft”. So theoretically the 4000th
> should cost as much as the 1st, and will force the manufacturer to
> spread the cost of tooling up over the life of the contract.
>
> Then the manufacturer takes advantage of the built up manufacturing
> capacity to sell the same ship to other customers at pure profit (See
> “F-16”), although 4K hulls would probably take them a long time to
> fulfill.
>
>
>
>> On Dec 16, 2021, at 9:55 AM, Alex Goodwin - alex.goodwin at
>> multitel.com.au <http://multitel.com.au> <xxxxxx@simplelists.com> wrote:
>>
>> Thanks for your reply and pointing out things I overlooked.
>>
>> Given what you've said, I'm now thinking of a (fairly) constant
>> materials price fraction which is not subject to experience curve
>> effects, and the residual assembly/hammertime cost, which is.
>>
>> Of course, I am still encouraging a less-worse model from anyone who
>> cares to comment.
>
> --
> Bruce Johnson
> University of Arizona
> College of Pharmacy
> Information Technology Group
>
> Institutions do not have opinions, merely customs
>
Bruce,

Thanks for replying, and the data point.

I think I'll pinch the "sell same unit to other customers at pure
profit" idea in some mutated form.

As I said in my original post, the whole kitten kaboodle is vertically
integrated - yards and operating company are under same ultimate
ownership, so retail price is less than relevant. These hulls aren't
being offered on the open market.

I was asking how would the _cost to manufacture_ the Nth hull would
vary, given the parent wanted to capture any such gains, to make overall
ship operation cheaper. Less capex - less depreciation - less
maintenance costs - etc.

For example, under the modified LC model I posited, assuming (say) a 2/7
raw materials fraction (MCr286), that leaves the residual fraction
(MCr714) subject to experience curve effects.

Assuming a 95% experience curve, the first hull would cost MCr1000
(after 0 doublings of cumulative volume), while the 4000th unit (11.96
doublings of cumulative volume later) would cost MCr286 (materials) +
MCr714 * (0.95 ** 11.96) = MCr286 (materials) + MCr387 (residual) =
MCr673 total.

Alex