3 ms·
It depends on whether we're speaking of turnover or profit. An average profit of 200K$/h for a single production line must be very rare (but it may exist). You'
by bpizzi 10y ago
It depends on whether we're speaking of turnover or profit. An average profit of 200K$/h for a single production line must be very rare (but it may exist). You're almost always not really 'loosing' 200K$ (otoh you'll surely be late in delivering your customers, and that may be valuable, think 'late delivering fees').
When you're 'only' earning an average 20K$/h (10% profit is an ok number I would say, but it may be far less if it's a common finished good), then it may have sens not to pursue buying couples of every single spare part you should have. The full price for always having in stock working spare parts for 100% of a 3M$ production line could be well in the tens of hundreds per month. At the end you're cutting your profit and that's the last thing you want to report to the board, as a plant manager.