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<div class="moz-cite-prefix">Dear David and Crispin,<br>
<br>
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.<br>
<br>
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.<br>
<br>
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.<br>
<br>
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.<br>
<br>
Paul<br>
<pre class="moz-signature" cols="72">Paul S. Anderson, PhD aka "Dr TLUD"
Email: <a class="moz-txt-link-abbreviated" href="mailto:psanders@ilstu.edu">psanders@ilstu.edu</a> Skype: paultlud Phone: +1-309-452-7072
Website: <a class="moz-txt-link-abbreviated" href="http://www.drtlud.com">www.drtlud.com</a></pre>
On 11/9/2012 2:09 AM, Crispin P-P wrote:<br>
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<blockquote cite="mid:-2796903382576442396@unknownmsgid" type="cite">
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Dear David
<div><br>
</div>
<div>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. <br>
<br>
Labour is thus an insignificant cost, it is material that is the
major expense. </div>
<div><br>
</div>
<div>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.).</div>
<div><br>
</div>
<div>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.</div>
<div><br>
</div>
<div>Regards </div>
<div>Crispin </div>
<div><br>
</div>
<div> 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?<br>
<br>
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?<br>
<br>
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?<br>
<br>
Dave 8{) </div>
<br>
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