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).
Analysing the effect of production quantity on car price, based on figures provided by Englebach.
| Identifier | ExFiles\Box 117\2\ scan0133 | |
| Date | 8th January 1940 | |
| COPY. To Hs.{Lord Ernest Hives - Chair} from Rm.{William Robotham - Chief Engineer} c. Ev.{Ivan Evernden - coachwork} c. Les.{Ivan A. Leslie} Rm.{William Robotham - Chief Engineer}2/MH.{M. Huckerby}8.1.40. REDUCTION IN PRICE BY INCREASE IN QUANTITY. We have taken the figures given by Englebach and tried to apply them to the Rationalised Programme. We have assumed that we achieved our target which is to produce a car for £650 in quantities of 3,000 cars a year. Englebach shows that if the output falls to 1,000 cars a year the price per car rises by 12½%, if it rises to 5,000 cars a year the price falls by 7½%. Applying these percentages to our basic price of £650 we get a price reduction per car of £50 going from an annual output of 3,000 to 5,000. This shows that we must rely on basic reductions in material and labour costs, both assisted by simplification in design, rather than on an increase in output to get our costs down at the present stage. It is, of course, possible that Englebach's percentages are not directly applicable to our product as this basic price is one third of ours. However, the analysis will settle this point. Personally we think that the inference will be found to be more of less correct. Rm.{William Robotham - Chief Engineer} | ||