Ceramic Fibers and Coatings Advanced Materials for the Twenty-First Century (1998) / Chapter Skim
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7 Cost Issues
7 Cost Issues
Pages 75-82
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From page 75... ...
As production increases, the aggregate cost of raw materials increases. 3_ Number of | I stations req'd I Cost summary Variable costs Material Labor Utilities Fixed costs Equipment Tooling Building Maintenance Overhead labor Cost of capital FIGURE 7-1 Elements in manufacturing costs.
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From page 76... ...
Variable Costs The aggregate manufacturing costs that change with production volume fall into three basic categories: materials, direct labor, and utilities. Materials include the input materials that end up in the final product, as well as scrap losses and other consumable items affected by production volume.
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From page 77... ...
If the fiber manufacturer produces fiber at full capacity to reduce manufacturing costs per unit, he will produce more fiber than can be sold and will lose money through excessive variable costs. If the fiber manufacturer produces only the amount of fiber that can be sold, he will incur high underutilized fixed costs, resulting again in his losing money.
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From page 78... ...
FINDINGS Relationship between Price and Volume Fiber prices could be reduced by a market-driven increase in production volume, which would lower the fixed cost per unit. Although current fiber manufacturers and independent consultants have conducted studies to predict fiber prices and cost levels, exact predictions are elusive because of the difficulty
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From page 79... ...
That is, they cost more than low modulus carbon fibers but less than high modulus carbon fibers. There are even specialty grades of carbon fiber that sell for much more than the carbon fiber prices shown in Figure 7-2.
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From page 80... ...
Carbon fibers are making light, efficient satellites possible that will allow worldwide portable telecommunications. Despite the tremendous market value of this innovation, however, Union Carbide, the original pioneer of carbon fibers in the United States, has long since gone out of the carbon fiber business after writing off the financial losses incurred during development.
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From page 81... ...
Therefore, the committee recommends research that focuses on improving the properties of polycrystalline ceramic fibers, recognizing that leveraging existing assets will help reduce fixed costs. Reducing the Risk of Commercializing Ceramic Fibers The costs and risks of incorporating CMCs into existing applications can be addressed by obtaining data from tests of CMC components to alleviate concerns about encountering "unknowns" during materials qualification.
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From page 82... ...
In terms of material consumption, this is a relatively small market. Because of the large production volumes needed to support fiber manufacture, every potential outlet for the use of ceramic fibers should be investigated.
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