Cost Per Unit
Introducing long term supply agreements
Our clients are looking for the best price and in the manufacturing process the greater the volume generally the lower the cost per unit.
- Purchasing raw material has minimum charges to our company such as minimum order quantity, process and delivery charges
- Quite often the setting of the machine takes longer than the production cycle time or time to manufacture the product. However if more cycles are purchased this initial cost of setting the machine is significantly diluted therefore the cost per unit is reduced.
- Special processes such as plating have minimum order charges and set up costs for example if these cost were £100 and our client orders 1 unit the cost is £100 for plating the component if we order 100 components to be plated the cost to our clients is for this process would be £1 per unit
- With these restricting factors and several more to take into account our clients can save dramatically on price per unit if larger quantities are ordered.
- That said the by-product or risk of this is over stocking, reducing your companies working capital tying up monies in stock etc...
Arnold Wragg ltd offers what we believe is a reasonable way around this or compromise...
· Arnold Wragg offers price brakes against batch sizes so that our client can see the potential savings
· We then offer to manufacture in bulk holding the stock for you initially at our cost
· In theory we become your stockist
· This stock is then yours to call off against a supply agreement i.e. x amount per month or every 3 months
· Arnold Wragg will then and only then invoice on delivery
· Keeping your stock lean and working capital high
If you are interested in our long term supply agreements please contact our sales team for further details