Question

You are the lead designer for a firm that produces casting patterns for investment casting. There has been a recent increase in requests for castings that require an artist to sculpt molds. The artists asks for the following:

• For each simple mold made, he wants $1000 in material costs and wants $4,272 in labor for his skills.
• For each complex mold made, he asks for a labor cost of $6200 + $133/hour of his time required in finishing. For complex mold material costs, he wants $1200 +8.63% of the total labor per mold

He’s either willing to charge you per part, or willing to charge you a flat rate of 100k to do all the parts you want. If you produce an equal number of simple and complex parts, and each complex part requires an average of 4 hours of finishing time, how many parts of each type would you need to make to make it more worthwhile to pay him the flat rate?

**Hint: this is a break-even problem

Answer 1

At breakeven, we can conclude that the payment of $100,000 is worthwhile as the customer pays the exact cost of making up the molds. On solving for the breakeven point, we get x= 7.25. The working of the same is given below in the images.

So, 7.25 parts of each simple and complex molds need to make this payment worthwhile.

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