Part 6 (1/2)

The amount of capital tied up in raw material supplies, stock in process and finished product should not be greater than that which is necessary to get the greatest output per dollar of invest world there is no such thing as a steady long-lived demand for any machine Hence the proposition to build a loco-press by -machine manufacture is entirely ill-timed at least

For this reason the stock in process must not necessarily be considered insufficient if it appears to be on the hand-to- line between excessive and insufficient stock must be drawn in each individual case

Raw material should be purchased in reasonable quantities with due regard to the price which varies with quantities but there should always be a regard for the amount of capital used for this purpose Any excess represents just that much extra capital unnecessarily risked in the business

There should be a constant supply of hout the entire work The stock in process should flow through the plant in a rapid but thin streareater than absolutely necessary to insure a steady supply for all of the workers, including the asse workers

An excessive stock of this or that piece, or of all pieces, means that ement Frequently it is the outcoards this point will use no care in purchase ofin the shop orders All that is needed is to just hurry forward the stock that ”happens” to be ”out”, and at the sao on unchecked

I finished stock are shoith pride, unmindful of the fact that every dollar's worth of unnecessary stock on the shelves in the stockroom, every dollar's worth of unnecessary work in the plant, represents idle ement

If this money is to be retained in the business, the systeed so that thethe best return

The excessive stock in process is soressiveness--the blindness that fails to see that there is as much money tied up in stock in process and in finished product as there is in the entire machinery equip down the amount tied up in stock in process The e of these modern methods and machines which tend toward profitable use of capital Suchideal of adaptability and largest output per dollar of investarding the profit, when considering changes in rowth of the separation of the es in the equipment are usually determined by the ard for the quality of work and the cost per piece The relation between the profit and the net labor cost is not considered

The cost of the product of the averageplant may be divided into three nearly equal parts: the material, the labor, and the burden; or, in four equal parts, if a reasonable interest charge is made for the use of the capital invested

The material is the iron, steel and other material that enters into the construction of the machine, and it is taken in the condition in which it usually comes to the machine shop

The burden includes all expenses and salaries necessary for the maintenance of the business

About one-half the aoes to the men who run the machine tools, and the other half is paid to work, transporting, etc

Therefore, the cost of hth of the total cost

On top of the net cost of the product there should be a profit If it is not there, the sooner so happens the better If it is there, then it is proportioned to the volume of the output

Therefore, both the size of the output and the labor cost should be kept in enerally known to the mechanical departments But even if it is not known, there is no reason for their being uninfore output for cost of the plant

Largest Profit Per Dollar Invested

One of the e the best return or profit per dollar of investment

We shall not refer to the quality of the product, the design, or any other ele of the business, for it goes without saying that no business can be ht out here is that, These thing being equal, the best scheement for profit is one that puts the capital where it will do the ood