Engineering Design

Production costs

Estimated Production cost

Components

Component	Estimated Cost (£)	Quantity	Sub-total (£)	Source
Hard Disk Drive	80	1	80	Historical data published in the San Jose Mercury, 30 Dec 1997
RAM	160	1	160	Historical data published in the San Jose Mercury, 30 Dec 1997
Floppy Disk Drive	10	1	10	Estimate based on prices from www.dabs.com
CPU	75	1	75	Based on cost of Intel Core II Duo from www.dabs.com
PCB	8	1	8	Based on estimate from Mindready (NI) Ltd
15pin D-type connector	1.88	1	1.88	Farnell
25pin D-type connector	2.63	1	2.63	Farnell
Mini-DIN type connector	1.17	3	3.51	Farnell
3.5mm audio jack connector	0.71	2	1.42	Farnell
Fused IEC connector	5.00	1	5.00	Farnell
Mains rocker switch	1.11	1	1.11	Farnell
Miscellaneous Components	30	1	30	N/A
Miscellaneous PCB Connectors	5	1	5	Farnell
Ribbon Cable	1	2	2	Farnell
Case	10	1	10	N/A

Labour

The cost estimate for the PCB includes populating the boards with all components and connectors. Therefore the only labour costs are assembling the component parts (main board, hard disk drive, floppy disk drive, power supply, speaker, fan) into the case. The time it took to reassemble the product on the bench was under a minute, therefore it is estimated that in a production environment one LC III could be assembled by a single worker every 5 minutes. Based on current wage figures from Siemens of £6 per hour, this equates to £0.50 per product.

Total

Estimated total production costs are £392.55. The original product retailed at $1350 (about £880 at the time). This would suggest that the estimate of £392.55 is slightly high, in that it implies a mark-up of 55% which is significantly lower than the 75% mark-up typical in consumer goods. Working backwards from a 75% mark-up suggests production costs of £220.

Minimising Cost including the impact of construction methods and aesthetic design on cost

The product cost was reduced in a number of ways during the design phase. The use of predominantly surface mount components reduces the PCB cost. This is in part due to the smaller board size that surface mount technology (SMT) allows. Also, SMT allows for automated component pick-and-place, which is quicker and cheaper than manual build in mass production.

The product was designed to use a established standard for hard disk and floppy disk interface. This reduced the cost of these component parts.

The choice of plastic over metal for the case also reduces the cost of manufacture. Also, the use of a VLSI chip containing most of the glue-logic between the logic chips on the board instead of discrete transistors further reduces costs.

The use of a single PCB and a small number of other component parts reduced costs associated with wiring during final assembly.

Whilst the product was designed with aesthetics in mind, the use of materials was also guided by cost. This is considered in the section "Aesthetic Design".