Direct Cost
Direct Cost:
is the cost that is directly affecting the production process which is basically the salary of the employee that is working on a machine and is producing output. And this is calculated by knowing the rate of the employee per day. This information is then added to the system either by updating employees salary using an excel sheet (link it to the article of updating employees salaries) or by updating the salary of each employee on the system using the following steps:
- Go to Garment IO System
- Open the human resource management
- Then navigate to the employees page
- Choose which employee you want to update the salary for, and then click on the edit button. This will open the employees edit page, where you can edit his daily salary.
This information is then used to calculate the cost of the machine per minute. The cost of the machine is calculated using the following steps:
- by grouping the machines together using the type if the machine for example: if we have 3 different types of machines which are singer, singer with 2 needles, and iron. Those are 3 types of machines, we start counting the machine number for each type of a machine. For example 1 on singer. 2 on singer with 2 needles, 3 on the iron.
- Then using this information we start counting how many employees works on each of the machine types. for example: 2 employees on the singer machine, 2 employees on the singer machine with 2 needles, and 3 employees working on the iron machine.
- Then we start taking the average of the daily salaries of those employees, and we do that for each type of a machine. For example: employee 1: has a daily salary is: 50, employee 2: has a daily salary of 100, employee 3: has a daily salary of 150, employee 4: has a daily salary of 200, employee 5: has a daily salary of 250, employee 6: has a daily salary of 300, employee 7: has a daily salary of 350, and employee 8: has a daily salary of 400. Now lets say that employee 1 and 2 are both working on the singer machine so take the average of their salary we will add both their salaries then divide it by their number. so (50+100)/(no. of employees=2) this equation will give us the average of their salary which is 75. Notice that this average is for a day. this day includes the shifts that those workers worked in.
- After we calculated the average of their salaries we are going to divide this number by the number of hours worked by the worker which is basically the shift hours, also we multiply it by 60 to get it per minute. so lets take the example above where we got that the average salary for 2 employees working in the same machine type is 75. and they both work the same shift which is the main shift with hours then the
- cost of machine per minute is (average salary of employees)/(shift hours)x(60 min) = so this would give us (75)/(8x60) = 0.16. so the cost of the singer machine per minute is 0.16. we are going to do the same steps for each machine type to get the cost of the machine per minute. This information is also added to the system using the following steps:
- Go to Garment IO system
- Then go to the Configuration
- Then open the production configuration
- Then navigate to the Machines types Page
- Then choose any machine you wish to edit the machine cost per minute for it, then add the new cost that you calculated, and the system would save it automatically
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