5 ms·

Let’s assume $500/hour in labor. Did this specific part require 440 hours of testing? The price doesn’t appear to come down at any volume, and the government al

by Den_VR 2y ago

Let’s assume $500/hour in labor. Did this specific part require 440 hours of testing? The price doesn’t appear to come down at any volume, and the government already substantially subsidized the R&D efforts, so just how much shenanigans do you think there are in that 220,000?

daedrdev 2y ago
It could be there were many parts made and many of them fail QC. Not to mention a part like this probably has to recoup all of its R&D and overhead costs from its sale because it was likely made by a supplier to Honeywell, not "substantially subsidized the R&D efforts" like you said.
- compiler-guy 2y ago
  They also are amortizing the cost of all that r&d over less than 5k units. All the tooling too.
  - x0x0 2y ago
    This would be my guess. I worked on microscopes sold to wet labs. When you have limited production runs, the fixed costs, that most of us ignore in saas, become very large on a per-piece basis. Even on 6 figure instruments, to take one that I spent 18 months on, approximately $55k per instrument sold was recovering R&D costs ($20k software, hardware the rest).
- Den_VR 2y ago
  While Airbus is almost famous for its “improper subsidies” through Launch Aid, I’d probably focus on just how GE was subsidized in the development of the CF6 engine family through technology transfers, military “system development and demonstration” programs, and layered tax incentive programs from city to federal levels. Airbus, GE, and Honeywell all have benefited from government subsidies. Many others have as well. But if it’s not “substantially subsidized the R&D efforts” like I said, I guess I’m corrected.
  - daedrdev 2y ago
    A part like this is almost certainty made by a supplier to one of those companies, who does not benefit from government subsidies. Developing the part, tooling, factory, and personnel for an extremely high quality, low part count run is very expensive.
quickthrowman 2y ago
How many of those valves do you think they sell? It’s likely in the hundreds or thousands, so a very low volume item. How many of them fail to pass the stringent quality tests? The price includes all of the defective valves that failed QA/QC testing. You still need all of the engineering and tooling, but the costs are spread across a small number of units vs a larger volume product.
Eddy_Viscosity2 2y ago
> Let’s assume $500/hour in labor. What about the cost of that gamma ray machine? Those don't sound cheap. And all the other likely very precisely engineered testing apparatus. Overhead is also a cost center.

by Den_VR 2y ago

daedrdev 2y ago

It could be there were many parts made and many of them fail QC. Not to mention a part like this probably has to recoup all of its R&D and overhead costs from its sale because it was likely made by a supplier to Honeywell, not "substantially subsidized the R&D efforts" like you said.

compiler-guy 2y ago
They also are amortizing the cost of all that r&d over less than 5k units. All the tooling too.
- x0x0 2y ago
  This would be my guess. I worked on microscopes sold to wet labs. When you have limited production runs, the fixed costs, that most of us ignore in saas, become very large on a per-piece basis. Even on 6 figure instruments, to take one that I spent 18 months on, approximately $55k per instrument sold was recovering R&D costs ($20k software, hardware the rest).
Den_VR 2y ago
While Airbus is almost famous for its “improper subsidies” through Launch Aid, I’d probably focus on just how GE was subsidized in the development of the CF6 engine family through technology transfers, military “system development and demonstration” programs, and layered tax incentive programs from city to federal levels. Airbus, GE, and Honeywell all have benefited from government subsidies. Many others have as well. But if it’s not “substantially subsidized the R&D efforts” like I said, I guess I’m corrected.
- daedrdev 2y ago
  A part like this is almost certainty made by a supplier to one of those companies, who does not benefit from government subsidies. Developing the part, tooling, factory, and personnel for an extremely high quality, low part count run is very expensive.

quickthrowman 2y ago

How many of those valves do you think they sell? It’s likely in the hundreds or thousands, so a very low volume item. How many of them fail to pass the stringent quality tests? The price includes all of the defective valves that failed QA/QC testing. You still need all of the engineering and tooling, but the costs are spread across a small number of units vs a larger volume product.

Eddy_Viscosity2 2y ago

> Let’s assume $500/hour in labor. What about the cost of that gamma ray machine? Those don't sound cheap. And all the other likely very precisely engineered testing apparatus. Overhead is also a cost center.