GlossaryKind of term: Cost and economicsEstimate
What is an estimate?
An estimate is the reasoned forecast, made before production, of what a part will cost to make, built from lines that each carry their own inputs.
It is sometimes called a pre-calculation. Each estimate holds for one given quantity: at another quantity the lines that fall once per batch carry a different weight. It is built from lines: stock material, machining per operation or setup, setup, programming, subcontracted operations such as anodising or hardening, and where needed tooling, inspection and packaging. Each line has its own inputs, such as time, rate, weight or quantity. The result is a cost estimate; a selling price only follows once mark-ups and margin are added.
What does an estimate depend on?
An estimate prices a route that has not yet been run. Times are estimated from the drawing, the model, the material, the chosen machine and experience; rates come from your own cost structure and material prices from purchasing. How close the result lands depends on how firmly the route is settled, how complete the drawing requirements are and how many similar parts you have made before. A new part with tight tolerances usually carries more uncertainty than a repeat order.
How does an estimate work in practice?
An estimate made of separate lines can be checked and adjusted line by line: if the anodiser's price or the requested quantity changes, only what depends on it moves. Many shops carry the same sheet through to a selling price, with mark-ups for overhead, risk and profit. Keep those steps visibly apart, so that in a negotiation you know where cost ends. After delivery, the post-calculation sets booked hours, material used and subcontractor invoices beside the estimate.
What is an estimate often confused with?
An estimate is not a quote: the estimate is the internal build-up, the quote is the document with selling price, lead time and terms that goes to the customer. Nor is a pre-calculation a post-calculation: the first forecasts, the second compares afterwards with what the part actually cost to make.
How do you see an estimate in Blake?
In Blake the estimate covers 3- to 5-axis milling, turning, mill-turn, drilling and tapping, with material, machining, finishing, setup and programming as separate lines, per piece and per batch. Every result is labelled as an estimate. More on estimating.
Frequently asked questions
What goes into an estimate for a milled part?
Usually stock material, machining per setup, setup, programming and a line per subcontracted operation such as anodising. Depending on the work, special tooling, inspection, deburring and packaging are added.
Is an estimate the same as the price on the quote?
No. The estimate gives a cost estimate. The quoted price is that cost plus mark-ups and margin, per quantity, and may also reflect a commercial choice.
What is the difference between an estimate and actuals?
The estimate forecasts cost before anything is made. Actuals, also called the post-calculation, put booked hours, material used and invoices beside it after the batch. The difference shows where assumptions or execution departed from plan.