Meaning
Financial determination of the per-part allocation of tooling or capital equipment costs over a planned production volume. An amortisation calculation divides the total cost of a mould or machine modification by the contracted run quantity to yield a unit surcharge. This value defines the boundary where the initial capital expense is fully recovered.
Cost Distribution
Capital expenditure recovery depends on accurate forecasting of production yields. The output of the amortisation calculation is added directly to the resin and processing cost per gram. If a mould ceases operation early, the remaining capital must be written off or reassessed.
Volume Sensitivity
Fluctuations in production volume alter the economic feasibility of the run. When the actual demand falls below the initial projection, the amortisation calculation yields an under-recovered balance that reduces the moulder’s margin. Conversely, a run that exceeds the target generates a surplus once the tooling asset has been fully paid off.
Mould Lifespan
Tooling wear limits the maximum volume over which a cost can be distributed. Hardened steel moulds survive millions of cycles, whereas prototype aluminium tooling degrades after a few thousand shots. An amortisation calculation for high-wear inserts must therefore restrict the amortization period to the predicted physical life of the metal rather than the commercial life of the product.
Running a glass-filled polyamide through an soft cavity accelerates this degradation and forces an earlier capital review.