How do machine shops price prototypes versus production runs?

The part and the two routings

The example is a fictional 303 stainless fitting, Ø.75 × 2 in, with three turned diameters, a Ø.25 through bore, two grooves and one Ø.125 cross hole, ±.005 in general tolerance, passivated to ASTM A967. On a CNC lathe it is turned in two operations, then the cross hole is drilled in a second setup on the mill. On a Swiss lathe the whole part is finished in one cycle, cross hole included, from bar fed through a guide bushing. The Swiss takes longer to set up (two hours by default against about 80 minutes on the lathe) but each part runs in about half the time and skips the mill entirely.

A shop with only a lathe quotes the lathe column at every quantity. A shop with a Swiss quotes prototypes on whichever machine is free and production on the Swiss. Either way, the quote should say which routing it assumes, because it drives both price and lead time.

Price per part at each quantity

Both columns use the same material, rates and 30% markup; only the routing differs. Read down a column to see the one-time cost being spread, and across to see the routing choice.

Where a prototype's price goes

For one fitting on the lathe, the cost is $393.38. Of that, $273.37 is CAM programming, lathe setup, the mill setup for the cross hole, deburr setup and first-article inspection: work that takes the same time for one part as for a thousand. The passivation shop's minimum adds $99.75. The stainless itself is $11.23, because the bar is bought as a short cut piece, and the actual machining is about $9.03.

Ordering five instead of one adds only $46.96 to the lot price, because the extra four parts cost little more than their minutes and material. That's the most useful thing to tell a customer who asks for one prototype: the second through fifth parts are nearly free compared with the first.

Where production pricing goes

At 1,000 pieces on the Swiss, setup and programming are $305.98 for the whole lot, $0.31 a part. Bar stock is $1.50 a part and machine and bench time $2.55. Run time also falls as the lot grows: the operator's rhythm and a tuned program make the thousandth part faster than the tenth, which our pricing engine models as about 10% less run time each time the lot doubles past 100 pieces, down to a floor.

The passivation lot minimum no longer matters at 1,000 parts; the finisher's per-piece price takes over ($420.00 for the lot). Lead time grows with the lot: 17 working days on the Swiss against 14 for ten.

How to quote prototypes so you don't lose money or the customer

Quote the prototype honestly, with the one-time cost visible, and offer the production price at the same time. A buyer who sees the setup charge separately understands why one part costs what ten nearly do, and an engineer can plan the next order.

• Quote 1, 5 and the expected production quantity on the same quote, so the buyer sees the curve.
• Ask whether the prototype needs the finish. The same fitting without passivation is $381.72 for one and ships 3 days sooner.
• Say which routing the production price assumes. If the production run moves to a Swiss or a multi-part example part, the prototype's minutes don't predict it.
• If the prototype program will be reused, state that the production quote drops the programming charge.
• Hold the minimum line charge, but don't hide setup inside it: a minimum is for tiny jobs, not for a prototype with two hours of real setup.

• Show setup as a separate line or not
• Quantity break calculator

What to do next

Take a part you quote often, split its cost into one-time work and per-part work, and price it at 1, 10, 100 and your largest realistic order. If the one-piece price is less than about three times the hundred-piece price, check whether your setup and programming time are in the quote at all. To run the same table on your own part and machines, upload its model or drawing to QuotedPart; it prices every quantity on your routings and rates.