Manufacturing-Mode Crossover Formula
Hardware has two cost layers: a fixed cost (FC) for manufacturing infrastructure — NRE, tooling, fixturing, line setup, regulatory qualification — and a variable cost (VC) per unit. The two archetypes load these layers in opposite directions; their cost curves cross at Q*.
The formula
Q* = (FC_mm − FC_ss) / (VC_ss − VC_mm)
The volume above which mass manufacturing beats small series. Below it, small series (machining, 3D printing, manual assembly) is cheaper. Above it, mass manufacturing (injection-mold tooling, automated lines) wins.
What goes into it
- Mass manufacturing — fixed cost (FC_mm)
- Mass manufacturing — variable cost per unit (VC_mm)
- Small series — fixed cost (FC_ss)
- Small series — variable cost per unit (VC_ss)
Worked example
Two archetypes with the same product, very different cost profiles:
| Fixed cost (FC_mm) | $1,000,000 |
| Variable cost / unit (VC_mm) | $2.35 |
| Fixed cost (FC_ss) | $100,000 |
| Variable cost / unit (VC_ss) | $10.00 |
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