calculating cost of a fabric.
PRICE OF A FABRIC
1) raw material cost
2)weaving cost
3)processing cost
4)yarn dyeing cost
5)packaging cost
6)greychecking cost
7)excise and other duties cost
8)machine and land depreciation cost
9)man power cost
10) power and water cost
11)profit
Thursday, June 10, 2010
COSTING AND PRICING OF A FABRIC
COSTING OF A FABRIC
Costing of any thing in this world is very complicated thing .
But what we think is complicated is nothing but a very simple thing if we anyalize it into the deep of it .
Factors affecting for any product suppose a grain we take as an example .
1) Investment for the seeds
2) Investment for Urea and Other products
3) Cost of water utilized.
4) Electricity cost .
5) Cost of labors Working in the Field .
6) Working Capital of Land and its Depreciation cost against any loans .
7) Profit
8) Wastage / Loss incurred due to Natural Cause , Insects , etc ..
9) Cost of Equipments Involved during the Process stage .
As we see above just for a simple grain which we grow in our fields has very complicated but a very basic process of costing .
Same as this there are many factors which affect the cost of a fabric .
As every Investor will try to pull out all his investment as soon as possible .
How soon he can recover his Investment is the real game .
Now we will go deep into the process of manufacturing a fabric .
What i will require to manufacture a fabric of any kind .
1) Land
2) Building
3) Machine
a) Weaving Machine
b) Warping Machine
c ) Grey Checking Machine
d ) All other Machines Involved During the process .
4) Loan .
The total cost of the Investement will Decide the Margin cost per pick .
This is the very Basic cost which will be always constant after the investment is done .
This cost always depends and changes as per your demographic conditions and your bargain.
Every manufacturer knows this cost .
So let this cost be secret for my entrepreneur friends .
But we can discuss the another part which also plays a vital role in deciding the price of any given fabric .
Pricing of the fabric in any Textile unit is done only by the owners or the high profile managers or anyone having a good Knowledge in the field of Textiles .
Calculating the price of a given Fabric
At any given instance lets assume the basic costing of Shirting fabirc.
Lets assume any Basic construction just for example .
The Below sort is just a hypothetical sort .
Warp - 2/80 s cotton dyed yarn .
Weft - 2/100 s cotton dyed yarn .
Ends per Inch = 130
Picks per Inch = 90
Fabric Width = 40 inches
Normally its given the Finished Width .
Calculating the weight of a Fabric .
Warp weight for any given Flat woven fabric is
= (Total on of Ends x Total Mtrs x Wastage percentage x Warp Denier ) / 9000,000
Therefore for the above sort
Total Ends = Fabric Width x Ends per Inch x Shrinkage Percentage.
Normally cotton shrinkage is 8% - 10% .
Total Ends = 40 x 130 x 10%
= 5720 ends of 2/ 80 cotton dyed yarn .
Warp weight = 5720 x 100 x 8% x 40 / 9000,000
= 2.7456 kgs
Weft weight for any given Flat woven fabric .
= Total mtrs x reed space x picks per inch x wastage % x denier of weft/ 9000000
= 100 x44 x 90 x 1.08 x 50 / 9000,000
= 2.376
Therefore
Fabric weight = Warp Weight + weft weight
= 2.7456 + 2.376
= 5.1216 kgs for 100 mtrs
RAW MATERIAL COST OF FABRIC
Yarn cost of warp and weft is to be known .
Suppose the Warp yarn Cost is 5 usd / kgs
and the weft is 7 usd / kgs .
then the cost of Fabric per 100 mtrs
= (2.7456 x 5 ) + ( 2.376 x 7 )
= 13.728 + 16.632
= 30.36 usd / 100 mtrs .
PRICE PER MTRS = 0.3036 USD / MTRS .
FINAL COST OF FABRIC
BASIC COST =( RAW MATERIAL COST + INVESTEMENT COST )
FINAL COST = BASIC COST + PROFIT AS PER BASIC COST.
ASSUMING INVESTMENT COST/MTRS IS 30 CENTS
AND PROFIT @ 30%
= (0.3036 + 0.30 )
= 0.6036 USD / MTRS
= 0.6036 + 30%
= 0.78468 USD / MTRS
FINAL PRICE = = 0.78468 USD / MTRS.
WELL THIS PRICE IS FOR MANUFACTURER HE MUST OWE IT ANYHOW TO RUN THE BUISNESS .
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