On Fri, 1 Jan 2010 19:19:54 +0200
Roland Jollivet <roland.jolli...@gmail.com> wrote:
> You re-coup money in the shavings.

This is the key to what's being said here. Let's say two manufacturers
make the same fitting starting with the same size brass blank.

1. They both sell it for the same wholesale price to their clients.

2. Each has identical labor and overhead costs in each part.

3. The manufacturer who scoops out more of the interior of the part and
converts it to chips (without increasing the machining time) will
realize greater profit because they will recoup more of their stock
cost from the sale of the chips.

HOWEVER - The customer is being robbed because he is not getting all
the material he is paying for! This is possible because there is no
acceptance inspection by the receiver, because the dimensions that are
undersized are uncontrolled by the part specification.

Methods like these are the basis of the Chinese manufacturing
economy. Here's a good explanation:
http://knowledge.wharton.upenn.edu/article.cfm?articleid=1776

Thanks,
Matt


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