Breakwater case

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School

Camosun College *

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Course

315

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Mechanical Engineering

Date

Oct 30, 2023

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pdf

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8

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BREAKWATER DENSTAR A Commercial opportunity Abstract: We are a SME located in Lezo, Guipúzcoa, Spain dedicated to the manufacture and commercialization of metallic industrial fixtures and manufacturer of high precision components. From the beginning, our Company has believed in creating strong partnerships with our customers. This commitment to our customers is demonstrated by making available local application engineers, knowledgeable direct sales, and partnering with world class distributors and local representatives who know our products and its quality inside out. Our commitment to our customers compels us to protect the supply chain, drive cost efficiency, and hold quality to the highest standard. Quality in our people, quality in our services, and quality in our products, continues to be our primary component. It has been quite some months since we started our commercial conversations with Breakwater Denstar. Looks a good potential customer and fits perfectly within our strategy: - Several manufacturing plants in America and Asia - Big enough to fit within our production capability - Good financial records Two months ago we received the RFI document. That was a milestone. And now we have, finally, the formal RFQ (Request For Quotation) and rest of tender document. It is not a big business but definitely is the kick off. The buyer wants our best commercial offer, Incoterms 2010 in the following terms: - EXW - FCA - CIP - DAP - DDP The short resumed specs of the RFQ are as follows:
Buyer: Breakwater Denstar Capital 7247 Av Des Erables Montreal, Quebec H2J2M1 Purchasing needs - Ball bearings AK550HS: 59.616* Units - Ball bearings AK650HH 39.744* Units (* Internal reference) Transport: Ocean freight containers only Payment: Irrevocable and confirmed L/C, deferred payment 180 days after shipment date. Rest of L/C details available once document issued. Technical specifications 1. Radial clearance The internal clearance should be as per DIN 620/T4 with the lubricant film must providing a complete separation of the bearing elements. The axial clearance should be between 8,5 to10 times the radial clearance. 2. Materials Rings: Vacuum degassed chrome steel 100Cr6, which is heat stabilized for temperatures up to 150° C (302° F). Balls: Vacuum degassed chrome steel 100Cr6 with ceramic balls. 3. Precision The tolerances for dimensional, form and running accuracy should well fit within ISO 492 and DIN 620. Should be manufactured to precision class 4 and class 2 (P4 and P2) as well as ABEC 7 and ABEC 9.
Additionally the internal tolerance should be higher than class HG, recommendable UP (ultra precision). The bearings should be compliance with the American AFBMA standards as follows: ISO DIN AFBMA Class 4 P4 ABEC7 Class 2 P2 ABEC9 4. Preload Single bearings Deep groove bearings at higher speed have to be preloaded in axial direction. For single bearings adjusting springs are to be used. Matched deep groove bearings In many cases, our bearing applications demand higher axial or radial capacity and smaller bearing dimensions or higher rigidity or a certain range of axial play. Such requirements should be met by matched bearings. Only bearings from the same series and same dimension can be matched. Universal matching Single bearings should be capable to be assembled to DF, DB or DT configuration. Bearings with the same kind of matching (e.g. universal matching with same axial play, without axial play or with same preload) should be capable to be interchanged within their respective group. When mounting universal matched bearings in the DT arrangement, with or without axial play or with preload the axial load should be equally distributed.
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Universal matched bearings from the same type of matching should be capable of being combined to form larger groups in the DF/DT arrangement or DB/DT arrangement with more than two bearings if required. Universal matching takes place with a measured load or a preload as shown in the chart below. When mounting universal matched bearings the etching on the rings (type designation) must be noted according to the illustrations. Universal matching with Axial play . Symbol DUA. The bearings are prepared in such a way that with inner and outer rings locked together in DF or DB arrangement, a certain axial play is included. As the magnitude of the axial play depends on the operating conditions, the axial play must be specified for each individual application. For example with axial play 40 to 60 microns, the symbol reads DUA 40.60 Universal matching without axial play . Symbol DUO. The bearings are prepared in such a way, that when inner and outer rings are locked together in DF or DB arrangement, there is no axial play in the bearing set. Universal matching with preload . Symbol DUV. When a rigid bearing arrangement, free from play, is required, a matching of bearings with preload is used. Bearings matched with preload have the advantage that under the effect of an external load only a small elastic deformation takes place, compared to unmatched bearing pairs or single bearings. The bearings are prepared in a way that if inner and outer rings are locked together they are under the effect of a preload. The preload has to be considered as an additional axial load in the life time calculation. The preload of DUV matched bearings is 2% of the dynamic load rating, however the max is 300N. A preload can be specified to suit your requirements. Special matching These bearings will be packed in pairs.
DB arrangement. Symbol DB. The matching in the DB arrangement is free from play. Should a definite axial play be required, the numbers will be added to the symbol e.g. bearing pair with axial play 20 to 40 microns: DB/20.40. When mounting the bearings, care must be taken that the arrows on the outer surface correspond to the arrangement shown in the opposite drawing. The bearings may not be exchanged for bearings of the same type of matching. The matching takes place with the measuring load according to the chart below. DF arrangement. Symbol DF. With the DF arrangement the bearing pair has an axial play of 5 to 15 microns. In case a definite axial play is required, the numbers will be added to the symbol, e.g. bearing pair with axial play 40 to 60 microns: DF/40.60. When mounting the bearings care must be taken, that the arrows on the outer surface correspond to the arrangement shown in the opposite drawing. The bearings may not be exchanged for bearings of the same type of matching. The matching takes place with the measuring load according to the chart below. DT arrangement. Symbol DT. This configuration is applied if axial loads from one direction are supported by two bearings. When mounting the bearings, care must be taken that the arrows on the outer surface correspond to the arrangement shown in the opposite drawing. The bearings may not be exchanged for bearings of the same type of matching. The matching takes place with the measuring load according to the chart below. Measuring loads and tolerances Type of matching Measuring load DF DB DT DUA DUO D 3 - 7 mm 8 - 15 mm 15 - 30 mm over 30 mm 12 N 22 N 32 N 50 N DUV Preload meeting the individual application 2% of the dynamic carrying number however max. 300 N
Width tolerance of matched deep groove bearings Type of matching Width toleranceB1 [μm] DF DB DT 0 - 250 DUA DUO DUV 0 - 500 . We have made our calculations and the total order would be as follows: - 44 euro pallets * of 1230 mm height each - 25 euro pallets * of 1392 mm height each (*) EUR 1 / ISO 1 pallet, weight 15 Kgs Total order sums 2.208 boxes with a gross weight of 12,350 Kgs each box. After collecting all data, the entire cost picture looks like as follows: - Manufacturing (per unit): AK550HS……………………………… 0,4 5 € AK650HH…………………………… .. 0,75 - Contribution margin (1) 15% of selling price - Certified departure Inspection: 600 € - Container Truck loading (2) 18,55 € per hour - Packaging (3) € 0. 015 - Maritime insurance (4) 0,35 % - Warehousing and order fulfillment 4,5 per pallet
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- Transport to origin port: 250 per container - Export customs clearance: € 55 per invoice - Pier operations: 150 per container - Customs inspection positioning (5) € 125 per container - Pallet disinfection: € 8 p er pallet - Origin terminal handling costs: € 165 p er container - Origin wharfage (T3) € 3,22 p er ton of goods € 0 ,65 per ton of container dry weight - B/L issuing € 60 p er bill of lading - Ocean freight: USD 1580 per 20’ USD 2550 per 40’ USD 2890 per 40 HC - B.A.F: USD 159 x 20’ USD 318 x 40’ USD 358 x 40’HC - C.A.F: 3% on top of any USD amount - Destination THC (6) : CAD 500 x 20’ CAD 600 x 40’ / 40’HC - Import customs clearance CAD 85 per container - Import tax GST: 9.975 % - Import tariff: 3,6 % - Destination inland haulage: CAD 600 per container - Container unloading: CAD 412 per container - Letter of credit opening costs: 1,21% over invoice amount - Letter of credit financial costs: 3,25% annual
(1) Initially we should aim for this CM or higher. Selling price depends upon several other factors that may increase or reduce the CM to levels different to the desired, as well as internal commercial decisions depending on our logistics capabilities or potential hidden costs (2) The free time for loading is 4 hours for a 40 and 2 hours for 20’ containers . Should we need more time than this, then this demurrages charges may apply (3) Per unit (4) Being combined transport also land portion is covered. (5) Upon customs request only, otherwise not. (6) Terminal Handling Charges The Exchange rate has been fixed with the bank (*) as follows: - 1 USD: 0.9232 EUR - 1 EURO: 1.370 CAD (*) The premium consists of two parts: a fixed part and a variable part. The fixed premium is 0.5% of the sum insured to a maximum of EUR 225.000,--. The variable premium is 0.1667% per month of the insured sum. 1/20 of the fixed and variable premium is payable at the issuance of the insurance. The remainder is only charged if the contract is awarded to us and has entered into force. We revised in full the entire RFP and see no other show stopper that prevents us for winning this contract. Certainly the market is tight, the competition is really putting lots of pressure on the service / pricing equation, whilst the supply/demand flow is not yet depressed, we have notice a great stress on prices so we must be very sharp, precise and exact in our selling offer, making a perfect balance. In this stage, and considering that Breakwater has requested several prices and, most likely, to the key to success is to offer as the most balanced offer between pricing, customer service and product quality.

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