Calculating Landed Cost Crossover between Flying Probe and Fixture Tooling
Landed cost crossover balances fixture NRE against probe runtime fees, shifting financial advantage to fixtures once batch volume savings offset tooling costs.
Batch Amortization Rate
Financial Spread
Setup costs for a production run are distributed across manufactured quantities through the batch amortization rate during contract pricing reviews. Tooling charges and programming hours and stencil preparations make up fixed overheads that apply to the entire manufacturing order regardless of final printed circuit board yield. Buyers negotiate this financial factor before assembly commences to spread non-recurring engineering expenses across predictable volumes over time.
Division of total setup expense by anticipated order quantity produces a per unit charge that remains constant until production scales require re-evaluation.
Quality Threshold
Component placement tolerances and solder paste deposition limits dictate whether produced lots achieve acceptable verification metrics during automated optical inspection. Defective assemblies exceeding predetermined defect limits trigger immediate line halts to prevent systemic propagation through downstream reflow and cleaning stations. Process engineers monitor yield trends to ensure that amortized setup calculations reflect actual good output rather than total fabricated panel volume.
Electrical testing equipment verifies continuity and shorts on finished circuit boards after final separation from production arrays.
Contractual Boundary
Commercial agreements define exact volume tiers that alter amortized overhead allocations when actual demand deviates from initial forecasts. Purchase orders specify minimum order quantities and maximum liability limits for unused raw materials procured specifically for dedicated assembly lines. Supplier contracts establish adjustment mechanisms when engineering change orders modify component bills of materials midway through active manufacturing schedules.
Legal terms outline ownership of custom stencils and dedicated test fixtures once the agreed production quantity concludes.