C12 Track project budgets and costs

Posted: October 7, 2010 in CORE

Initial knowledge 1

Current working level 2

I have not had a great deal of experience of tracking project budgets and costs although I do recognise the importance of it.  When doing packaging design the main aim was to produce an item that stood out but it also had to be a viable cost-effective solution.  The designs tended to be made from vacuum formed plastic and the main cost was for printing as the designs tended to be aimed at the mass market.  In ED216 and 7 I researched how much the materials were likely to be, however in all honesty I had already decided on the materials I was going to use and tallied up the cost once I had come up with a final design.  I realise now that this is not a financially wise approach because I was certainly shocked to find out the cost of some of the materials.  Naturally had the materials been far to expensive then I would have had to reassess the final ideas however I had a general idea that items such as sheet aluminium and  acrylic would not cost the earth.  This was ok for the plate rack as it was one-off piece and in reality was not made of a mass amount of materials and components.  The subsequent cutting list was:
1050mm x 457mm clear acrylic = £14.47

457mm x 457 mm clear acrylic = £7.63

2 x A3 clear acrylic = £9.404

acrylic hinges = £1.84

1000 x 500 mm sheet aluminium £10.01 + VAT

TOTAL = £43.34 (all prices taken from the cheapest available on the internet)

A total of just under 44 pounds was quite surprising considering there were only 2 main materials used in the manufacture.  However as the product was supposed to be designed for a high-end contemporary kitchen a fair selling price of around £60 would still allow for a healthy profit, and when taking into consideration the bulk cost of materials if purchasing to construct multiple units, the cost of production would be reduced significantly.  For my ambiance light it was a slightly different matter as the brief stated that it was to be produced for the mass market and so I had to source cheaper materials.  I wanted to produce the light for less than £30 and subsequently the pricing was as follows:
3 x 200mm x 300mm live edge acrylic 3mm = £4.79

1 x A3 sheet light blue acrylic 3mm = £3.76

3 x 200mm x 300mm clear acrylic 3mm = £4.25

6 x 200mm x 300mm dark blue transparent acrylic 3mm =  £7.50

300mm x 15mm clear acrylic tubing = £5.973

high luminosity white leds £1.79 each

3 ultra bright blue leds = £1.79 each

TOTAL =  £31.64 (all acrylic bought from E-bay and leds from Maplins, total price does not include the unused white leds)

In reality I was £1.64 over my allocated budget but again taking into consideration the cost of buying the items in bulk a cost price would greatly reduce the cost of materials and bring the lamp back under the £30  I had originally set.
For the commercial more mass-produced lamp it was more necessary for me to try to stick within an allocated budget.  However I only really took into consideration the cost of the raw materials needed to create the final product.  However there is an alternate pricing such as the cost of production and the energy used by machines when making the product.  In a professional sense designers would need to be paid , prototypes are extremely expensive to produce and then there’s things like packaging, marketing, labour and a whole host of variable costs that would have to be taken into consideration when budgeting for a mass-produced item.

Because of a lack of experience my budgeting is at best basic although I do recognise the importance of keeping a detailed list of materials in order to produce a  cost-effective solution that doesn’t spiral out of financial control.  It is certainly something I will utilise from the beginning of my next project and I will put an emphasis on trying to produce the product for the cheapest possible price, and take into consideration other factors, if it is designed to be mass-produced.

For ED302 I actually researched the prices of materials before purchasing them.  I had intended to use veneered MDF, but after some consultation found the prices to be unrealistic and the material too heavy to function anyway.  I stated I wanted to create the unit for less than 100 pounds and managed to source and construct materials for 96 pound which I felt represented a cost effective solution to my specification.

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