[Stoves] Cost of stoves
Paul Anderson
psanders at ilstu.edu
Fri Nov 9 07:52:53 CST 2012
Dear David and Crispin,
And where the wages are less than $100 per month (and some of that money
is for a reasonable meal during the work day), the labor component is
almost negligible compared to the costs of new (not scrap) sheet metal.
When the stove is ceramic/fired clay, the clay can be cheap but there
are the costs of firing it and then transporting it. So the labor
still adds only a relatively low amount to the stove.
Can these low-income workers (yes, they have a job and they are better
off than those without any work) afford a $25 stove? That would be a
week of wages.
Would any of us who live in the affluent societies pay one week of wages
for a stove? That might depend on your income!!! And we have
discretionary money far above the money needed for food and lodging.
Paul
Paul S. Anderson, PhD aka "Dr TLUD"
Email: psanders at ilstu.edu Skype: paultlud Phone: +1-309-452-7072
Website: www.drtlud.com
On 11/9/2012 2:09 AM, Crispin P-P wrote:
> Dear David
>
> Typical worker wages in many poor countries are $200-300 a month.
> Informal sector pays less. Industrial production would make a single
> pot metal stove in 8-10 minutes including boxing.
>
> Labour is thus an insignificant cost, it is material that is the major
> expense.
>
> In volume you can assume materials to be about 2/3 the marginal cost
> of production and the retail price to be between 2 and 6 times the
> marginal cost. Labour-intensive production can be very good if they
> have exactly the right tools (which is often not the case.).
>
> Anything you buy in North America at a store sells for about 10 times
> the marginal production cost, just to give you an idea what consumer
> societies pay.
>
> Regards
> Crispin
>
> I notices a post here, where a facility employing 6-10 people coulf
> produce 500 stoves per month. This means that each person can produce
> 50-80 stoves per month. Assuming a 40 hour work week (which may be
> too low), that means 170 hours per month or 2-3.5 hours per stove.
> Assuming normal G&A expense, (things like cost of the building and
> tools) and some component cost for the stove (sheet metal costs
> money), would the stove not cost over 2-3.5 hours of a worker's time?
> What does this say about the cost of a stove?
>
> If a stove must sell for $X, does this imply the worker's income must
> be well below $X/2 per hour since there are G&A and material costs
> involved?
>
> If my analysis is incorrect, please tell me how the business can
> survive with less income than expenses. Can the worker survive with
> less income than it costs him to survive?
>
> Dave 8{)
>
>
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