A 200g polyethylene part can be manufactured by either vacuum forming from an extruded sheet or by injection moulding. The productivity rates are different between the two processes. Therefore, to calculate the cost per part for each manufacturing approach at different production volumes, it is important to take into consideration the materials per part cost as well as the processing costs. To solve this problem the following information will be required.

Polyethylene price in extruded sheet is 3.00 /kg Polyethylene price in pellet form is 2.00 /kg

The injection moulding machine can make 40 parts at a time in a cycle time that is 1 minute. The waste material created in each injection cycle in the runner system and sprue of the injection moulding machine is 200g. The vacuum forming machine can make 2 parts at a time in a cycle time that is 30 seconds and the waste material created in each cycle is 20g.

The capital cost of the injection moulding machine and the 40 cavity mould is 200,000. The capital cost of the vacuum forming machine and the associated 4 component former is 50,000.

The running costs including labour and energy costs combined for the injection moulding machine is 200 per hour The running costs including labour and energy costs combined for the vacuum forming machine is 100 per hour.

What is the cost (in per part) of injection moulding 100,000 of these parts?