From the Rolls-Royce experimental archive: a quarter of a million communications from Rolls-Royce, 1906 to 1960's. Documents from the Sir Henry Royce Memorial Foundation (SHRMF).
Cost analysis and breakdown for a Goshawk chassis, comparing proposed costs with current figures.
| Identifier | ExFiles\Box 18\6\ Scan226 | |
| Date | 24th November 1930 | |
| C O P Y. 24/11/30. My Dear H.{Arthur M. Hanbury - Head Complaints}, I have explained to this afternoon's conference at Derby, that up to August next, we may require only 750 of the old chassis per year, and that we shall have to have a second line of chassis to sell. From that time onwards we shall lose, in respect of establishment charges, at the rate of [redacted] per working day. The conference have been told of my conversation with you last Monday week, when it explained that the Sales Department were of opinion that the chassis which is to be sold as a second line should not cost more (without tyres) than £950. I have explained that you are of opinion that a revised Goshawk can be manufactured for £950 provided that establishment charges are reduced; cost of material is reduced and efficiency of production is increased. The Technical Officials have separately formed their opinion of the cost of the Goshawk as we know it at the Works, and have come to the conclusion that the cost will be as follows - Labour. 77% of the labour of the present chassis, that is to say 77% of £433. = £333. Material. 75% of the cost of the material of the present chassis. We think the cost of the material of the present chassis, viz. £623 should be reduced by at least 15% to say £530. 75% of £530 would make the cost of the material for the present Goshawk = £400. Establishment charges. [Struck through text: Add for establishment charges] [redacted] for labour and we have a total cost of the chassis of = £1177. You based your opinion that the simplified Goshawk could be produced at a cost of £950, on the assumption that, firstly, a considerable reduction could be made in establishment charges. That brings the total cost of the chassis down to £1107. You suggested that there might be a reduction in cost of material and you will see that in making our calculations we have reduced the cost by 15%. You will note, therefore, that to bring the cost of the chassis down to £950 the labour, which is estimated at £333 has to be reduced by £74, or a reduction of 22.4%. Mr. Formald thinks that the utmost he can do, by improving the efficiency of the shop, is to reduce the cost of labour on the chassis by 5%, or £16.10.0. It would appear, therefore, that the only way by which the Goshawk can be reduced to £950, would be by the new chassis being simplified as compared with the present design so as to reduce the cost of labour by a further £57.10.0. On an output of 1500 chassis a year, this represents a sum of £87,000. Yours sincerely, CJ. | ||