6.4

System Cost
Largely a function of the number of components.

(note: price is different from cost)

Price is
what the consumer pays.

Cost is
the expense of design and manufacture.
Price includes
1) cost, 2) marketing, 3) reinvestment in research, 4) profit.

Cost includes
Cost per piece =
manufacturing costs (parts + assembly + testing) + NRE / total # of pieces.

NRE (non-recurring engineering)

design costs -
schematic entry, simulation, documentation, prototyping, debugging

A tradeoff exists between NRE and manufacturing costs.

Striking the right balance requires an estimate of the total number of pieces to be manufactured.