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Old 06-24-2008, 12:25 PM   #496
Jack B Nimble
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Quote:
Originally Posted by ddimick View Post
That's not really true. As volumes go up the cost to manufacture goes down. Buying components in bulk is cheaper, and contract manufacturers will bid more aggressively on larger contracts that keep more of their workers employed for longer periods, even if at a reduced profit. Cash flow stability and predictability have real value that suppliers are willing to compete for.

Of course there is a threshold where any additional increase in volume does not net a reciprocal decrease in manufacturing cost.
Too many variables to discuss in a meaningful way. For instance, increasing volume can also increase the per unit cost. If any of the components are already being used as fast as they are produced, as seems to be the case with the eInk screens, increasing production can mean outbidding competitors for those resources, driving up the materials cost.

I could also make arguments in the opposite direction. As I said, we do not know enough about the market for the various components, not to mention their other costs both fixed and variable, to talk about production costs in a meaningful way.

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