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Materials costingDerived from approved sample style.First
step-Determine what specific products will be used and the required
number of units per garment.Material costs are affected by % of
utilization.Utilization depends on how much material is actually
consumed compared to the amount that becomes a part of the final
product.
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Materials costingMost people use % of cost of each material to
cover waste.Poor utilization produces waste.Other costs associated
with materials such as inspecting and shading of fabrics are
treated as an activity cost or included in total cost of the
product.
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Material costingMaterial costing:First thing, find out the
specific material.voile, cambric, canvas etcThen what is
consumption in one garment..While doing costing , the unit for each
material need to be kept in mindFor E.g.Fabric is generally
supplied in yardButton are supplied in Gross.
Material costing parameterFactor affecting Sourcing of fabric
Various sizes.XS,S ,M,L,XLMinimum qty (LOT) supplied by
supplierUtilization or Efficiency of marker.Cost of Inspection of
fabric Large number of shades..
Reason for WastePoor Utilization of fabric ie.. Inefficeint
markar planningPoor quality of material..Inconsistent fabric
widthrecuttingDesign Requirement.i.e. matchingExtra cutting
Fabric CostingImportant to know the
following:Count/construction/weight of the fabricThe area from
where this fabric has been sourcedThe order quantityWidth of the
fabricThe no.of colors in a print/yarn dyed fabricLimitations of
each type of fabric
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Fabric Costing2 types of costs-Value added process
costCommercial costVAP Cost-Starts from the fiber/yarn stage and
goes on till the fabric is ready.Commercial Cost-Rate at which the
fabric is selling in the marketplace.
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VAP costFiber-Spinning-Dyeing-Weaving/Knitting-Fabric.At each
stage there is finishing so that the input to the next stage ready
for use and clean
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Commercial cost
The price at which the fabric is being sold in the market.This
cost is VAP cost+Profit of the manufacturer or agent.
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Materials & Trim costsCosts increase when moving from
basic/staple to fashion garmentsWhat are Staple or Fashion
garmentsSome trims might show very little variance in cost between
staple to styleOther considerations are minimum quantities and lead
timesRisks involved in fashion colors
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Style requires Precise Cost InformationTracking actual vs
standard costsEven with common fabric & trims usage can vary
greatlyImportant to know which styles are winners Important to
realize these areas of cost and price the line accordingly
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Example1000pcs fashion pants order60% with pink stripe fabric
with matching drawstring & piping40% with same fabric 3/4
elastic,pink drawstring and pink zippersThe color pink was a
special run-hence both for fabric and trims-required premiums.After
receipt of trims & fabrics,order was revised:Total 800pcs:80%
5pocket jeans and balance was full elastic
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Risks of fashion goodsBuying high fashion fabric at a premium
priceCustomer changing style at the last minute50% more time spent
by sales,marketing,manufacturing to overcome crisisFabric, trim
carry over costsRe-dying trims
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Fabric Procurement ConsiderationsQualityDeliveryServicePrice
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Costing in Fashion ColorsAll color priceAll color price with
exceptionsBase price with specific color up chargesBase price with
color up charges for each color groupAdvantages and disadvantages
to an apparel Manufacturer
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Forecasting Fabric color demandsMfger doing basic items decided
to take orders for fashion items for Spring99Spring line included
ladies full elastic shorts in stripe sheeting of various
colors.Based on first estimates given by buyer,it was calculated
that about 230,000mts of fabric would be requiredBased on
historical color consumption's,merchandising estimates etc the
color usage was :
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Quality ConsiderationsFabric InspectionIdentification &
removal of fabric defects through out manufacturing cycleLoss of
fabric yield due to defect splice outAdditional cutting room
costsSewing room costs to re-cut and re sew defective panelsFall
out effect of irregulars during final inspection
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Case Study -1Fabric color Up-chargesColorYardageSky
blue36,800Khaki29,900White75,900Pink46,000Fuschia16,100Lime20,700Burgundy
4,600
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Fabric color Up-chargesAll color Price = Rs 60/mtAll color price
with exceptions:All colors:Rs 55/mtExcept Fuschia- Up-charge of Rs
5/mtLime- Up-charge of Rs2.50/mtBurgundy- Up-charge of Rs 3/mtBase
Price with color up-charge for each colorBase-Rs 45/mtSky blue-Rs
2.50/mt Khaki-Rs 2.00/mt White- Rs 0/mtPink- Rs 3.00/mt, Fuschia-Rs
4.50/mt, Lime-Rs 4.75/mtBurgundy- Rs 5.00/mt
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Fabric color Up-chargesBase price with color up-charges for
color groupsLight- Blue/Khaki/White=Rs 50/mtMedium-Pink/Lime=Rs
54/mtDark-Fuchsia/Burgundy=Rs 65/mtCalculate the weighted average
price/mt for all the 4 types of fabric costing.
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First Quality Fabric v/s Off Quality FabricsFirst quality fabric
19.25yds/doz@$2.55/yd Off Quality fabric
19.25yds/[email protected]/ydAdditional Costs Spreading/cutting
$0.60/ydFabric Cn varinance $1.12/dzSewing floor extra handling
$0.73/dzFinishing room extra handling $0.05/dzLoss of profit due to
irregulars$1.14/dzFallout effect on finished goods
inventory$1.11/dzTOTAL$4.752/dz
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First Quality Fabric v/s Off Quality FabricsComparison of costs
per dozen 1 st quality Off Quality @$2.55 @$2.20Yds Reqd
$49.09$42.35Addnl Handling 0$4.75Total$49.09$47.10Net Saving
$1.99-4%
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Case Study -3Costing for Material variances
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800 dozen of pink stripe sheetingInitial size ratio: 3 5 7 9 11
2: 3: 3: 2: 260 fabric width, 1.25mt consumptionRevised Size ratio
5 7 9 11 13 2: 3: 3: 2: 248 fabric width, 1.60mt consumption
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Projected ActualCn/doz15.0204mts/doz19.24mts/dozSize Mix 3 5 7 9
11 5 7 9 11 13 (Cn=19.2450 on 48 to 19.8420 on 48)Fabric Cost
3.1875(60)2.55(48)
Calculate fabric cost per dozen in each case
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Basic TrousersDeal with Mill OnlyBigger Dye lotsEasy fabric
replacementPhysical featuresCo-op of mill in solving problemsSewing
Features-PredictableLead time-Long
Fashion TopsDeal /mill,finishers,jobbersSmall dye lotsNo
replacement of fabricPhysical featuresCo-op reqd. at 3 levels
Sewing Features-PredictableLead time-Long
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