Set-up cost

The initial expense of preparing production, including purchasing equipment and making moulds or dies.

The initial cost of preparing production, including equipment, tooling and organisation.

Set-up cost is the initial cost of preparing production, such as installing equipment and tooling. Unit cost is the cost of making one item. Expensive machinery may be worthwhile when its cost can be spread across many products, but difficult to justify for a single item.

Distinguish set-up cost from unit cost. Mass production has high initial set-up costs, but these are spread across many products.

When discussing cost, distinguish the initial set-up cost from the cost per item. Expensive machinery can still give a low cost per item over a large production run.

The time and expense needed to prepare machinery and equipment for a production run.

Definition

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Edexcel GCSE Design and Technology · 1DT0

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Definition

How each exam board covers it

Edexcel GCSE Design and Technology · 1DT0

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Related key terms

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