Pricing in mechanical engineering and instrument making
Tests
1. What does not apply to the features of machinery and equipment as objects of assessment?
a) a radical change in value over time;
b) lack of influence on the cost of associated costs;
c) low similarity of results when determining the average price level;
d) the difficulty of forecasting future income.
Answer: b) no impact on the cost of associated costs.
2. Life cycle of machines and equipment:
a) relatively long;
b) relatively short;
c) medium duration;
Answer: b) relatively short.
3. To what extent does the scientific and technical process affect the cost of equipment?
a) strongly;
b) moderately;
c) has no effect.
Answer: a) strongly.
4. The market for machinery and equipment refers primarily to the market:
a) pure competition;
b) oligopolies;
c) pure monopoly;
Answer: b) oligopoly.
5. Which of the listed factors does not affect the market value of the equipment being assessed?
a) the state of legislation in the field of taxation;
b) prices for similar objects;
c) investment purposes established by the owner for the use of the valuation object;
d) location of the assessment object.
Answer: c) investment purposes established by the owner for using the valuation object.
6. Which of the evaluation principles refers to the principles determined by the action of the market environment?
a) usefulness;
b) residual productivity;
c) competition;
d) expectations.
Answer: a) competition.
7. The wholesale price of the manufacturer does not include:
a) full cost;
b) profit of the entrepreneur;
c) sales allowance;
d) value added tax;
Answer: c) sales allowance.
8. Machinery and equipment are most often sold at prices:
a) estimate;
b) wholesale;
c) retail.
Answer: c) retail.
9. The negotiated price differs from the announced price:
a) individual character;
b) the presence of specified conditions;
c) the presence of allowances and discounts;
d) informational secrecy.
Answer: b) the presence of agreed conditions.
10. The demand curve reflects the relationship between demand and price
a) buyer;
b) manufacturer;
c) dealer.
Answer: b) manufacturer.
11. If the price exceeds the equilibrium price, then we observe:
a) shortage of goods;
b) obsolescence of the product;
c) overproduction of goods.
Answer: c) overproduction of goods.
a) requests from manufacturers;
b) inflationary processes;
c) dynamics of price changes;
d) customer expectations.
Answer: c) dynamics of price changes.
13. The transaction price is:
a) the negotiated price between the seller and the buyer;
b) the announced price for a specific date;
c) the actual price of the transaction;
d) book value;
Answer: a) negotiated price between the seller and the buyer.
14. What is the task of the appraiser?
a) in the formation of the transaction price;
b) in calculating the contract price between the parties;
c) in calculating the expected value of the transaction;
d) in detailing the price assigned by one of the parties to the transaction.
Answer: c) in calculating the expected cost of the transaction.
15. What is the function of prices used to calculate enterprise performance indicators?
a) distribution;
b) stimulating;
c) accounting.
Answer: c) accounting.
Self-test questions
1. What features are inherent in machines and equipment as objects of assessment?
Answer: The following features of the assessment of machinery and equipment (hereinafter referred to as MO) can be highlighted:
1) Variety of names, types, modifications of MO - industry lists alone number hundreds of thousands of product names and, accordingly, the number of MO manufacturers is also large, which leads to a wide range of prices for the same product;
2) Technical progress not only changes the manufacturing technology and type of MO, but also their functional purpose. Functional obsolescence tends to accelerate; from time to time, technological revolutions occur that lead to radical changes in consumer priorities;
3) Identification and localization of cash flow attributable to MO, as an integral part of the business, is often difficult due to the complex structure of production.
2. What is the peculiarity of automated assessment of the cost of machinery and equipment?
Answer: A feature of automated assessment is the construction of stochastic models of prices of machines and equipment using the Excel computer program. Methods of correlation-regression and dispersion analysis are used to model the dependence of prices on the technical parameters of machines, as well as to build price trends.
3. What caused the radical change in the cost of machinery and equipment over time?
Answer: Radical changes in the cost of machinery and equipment are caused by wear and tear. Depreciation is depreciation or obsolescence, characterizing the loss of value over time due to a decrease in its usefulness caused by technical and economic reasons: operation; long-term storage; scientific and technological progress; economic situation.
4. What difficulties may an appraiser encounter when determining the average price level when estimating the cost of machinery and equipment?
Answer: The variety of names, types, modifications of machines and equipment - industry lists alone number hundreds of thousands of product names and, accordingly, the number of manufacturers of machines and equipment is also large, which leads to a wide range of prices for the same product.
5. What associated costs are associated with the purchase of machinery and equipment?
Answer: Associated costs associated with the purchase of machinery and equipment include transportation, customs duties, installation, commissioning, repairs, etc.
6. What features of machinery and equipment cause the rare use of income approach methods in their valuation?
Answer: The use of income approach methods faces the limitation when it is difficult to estimate the net income directly from the valued object due to the fact that this object does not produce final products or final services or is of greater social than economic importance.
7. What factors influence the cost of machinery and equipment?
Answer: The cost of machinery and equipment is influenced by:
a) functional indicators (productivity or power, load capacity or traction force, dimensions of the working space, accuracy class, degree of automation);
b) operational indicators (failure-free operation, durability, maintainability, storability);
c) design indicators (weight, composition of main structural materials);
d) indicators of the efficiency of machine operation (consumption of various resources during the operation of machines per unit of time and per unit of production or work);
e) aesthetic indicators and ergonomic indicators.
8.What impact do intangible assets have on the value of machinery and equipment?
Answer: Operating software, technical data, industrial designs, patents are examples of intangible assets that increase the value of machinery and equipment
9. What causes the problem of identifying machines and equipment?
Answer: An identification problem arises when the objects being assessed are movable property, but due to the way they are installed (permanently attached to real estate or used in an installed form for an extended period of time) can be classified as real property. This is most often equipment built into a building or structure and tightly connected to it (ventilation system, communications, heating and energy networks, elevators, etc.).
10. Describe the influence of the life cycle on the value of machinery and equipment.
Answer: Figure 1 schematically shows the dependence of price on the stage of the object’s life cycle:
Fig. 1 Life cycle influence on the cost of machinery and equipment
11. What serves as the initial basis for determining value based on the cost approach?
Answer: With the cost approach, the sum of costs for the creation and subsequent sale of an object is taken as a measure of cost, i.e. its cost.
12. How is the main pricing parameter selected?
Answer: The choice of the main pricing parameter depends on the purpose of the machine or piece of equipment: for a vehicle - load capacity, for an engine - power, for a machine - the maximum size of the workpiece, etc.
13. What type of curve does the price change depending on the degree of obsolescence?
Answer: curve of change in cost due to physical wear and tear - Fig. 2
Rice. 2 Cost change curve for physical wear and tear of machinery and equipment
14. List the methods of direct and indirect cost determination.
Answer: Methods based on direct cost determination methods:
1) element-by-element cost calculation consists of summing up the costs of individual elements of the valuation object, as well as the costs of their acquisition, transportation and assembly, taking into account profit;
2) the method of analysis and indexation of existing calculations is to determine the cost by recalculating the initial cost by summing up the indexed costs by economic elements (costs of materials, components, workers' wages and indirect costs), bringing them to the modern level;
3) the method of aggregated cost calculation consists in determining the cost by calculating the full cost of production according to aggregated standards of production costs, taking into account the profitability of production.
Methods based on methods for indirectly determining costs:
1) the substitution or analog-parametric method, which is based on the principle of substitution and consists in the selection of objects similar to the one being evaluated in terms of utility and functions, which allows, based on known prices and technical and economic characteristics of analogue objects, to calculate the cost of the evaluated object;
3) the method of specific price and economic-technical indicators, which consists in calculating the cost based on specific price indicators, i.e. price per unit of the main parameter (performance, power, etc.), mass or volume.
15. Should associated costs associated with the acquisition of equipment be taken into account when determining the cost of this equipment?
Answer: When assessing machines and equipment The cost of an analogue often includes the costs of bringing the asset into working condition. These costs are often called preparation costs. They often include the necessary associated costs - for design work, transportation, installation and installation, connection to communication networks, and commissioning.
Bibliography
1. Federal Law “On Valuation Activities in the Russian Federation” dated July 29, 1998 No. 135 - Federal Law “On Valuation Activities in the Russian Federation” (as amended by Federal Laws dated December 21, 2001 No. 178 - Federal Law dated March 21, 2002 No. 31 - Federal Law, dated November 14, 2002 No. 143 - Federal Law, dated January 10, 2003 No. 15 - Federal Law, dated February 27, 2003 No. 29 - Federal Law, dated August 22, 2004 No. 122 - Federal Law, dated January 5, 2006 No. 7 - Federal Law, dated July 27, 2006 No. 157 - Federal Law, dated February 5, 2007 No. 13 - Federal Law, dated July 13, 2007 No. 129 - Federal Law, dated July 24, 2007 No. 220 - Federal Law). Basic provisions.// SPS ConsultantPlus.
2. Federal assessment standard “General concepts of assessment, approaches and requirements for assessment” (FSO No. 1), approved by Order of the Ministry of Economic Development of Russia dated July 20, 2007 No. 256. Basic provisions // SPS ConsultantPlus.
3. Federal valuation standard “Purpose of valuation and types of value” (FSO No. 2), approved by Order of the Ministry of Economic Development of Russia dated July 20, 2007 No. 255. Basic provisions. // SPS ConsultantPlus.
4. Federal assessment standard “Requirements for an assessment report” (FSO No. 3), approved by Order of the Ministry of Economic Development of Russia dated July 20, 2007 No. 254. Basic provisions. // SPS ConsultantPlus.
5. GOST R 51195.0.02 - 98 Unified system of property assessment. Terms and definitions). // SPS ConsultantPlus.
6. Standard 04.21. “Evaluation of the value of movable property. Estimation of the cost of machinery, equipment and vehicles." Approved by the Decision of the Board of the Interregional Self-Regulatory Non-Profit Organization - Non-Profit Partnership "Society of Professional Experts and Appraisers" Minutes No. 21 dated October 19, 2007.
7. Estimation of the cost of machinery and equipment: Textbook / Sub-general edition by V.P. Antonova - M.: Publishing house "Russian Assessment", 2007 -254 p.
The activities of enterprises in market conditions require making management decisions based on an analysis of the market situation, trends in its changes, taking into account feedback. Moreover, the main task of the enterprise in a competitive environment is to ensure the required quality of products and services provided.
Production policy is formed primarily on the basis of studying a potential buyer and is translated into reality with the help of a marketing system.
The first direction is internal marketing, for which market research is fundamental.
The results of market research are translated into a finished product through a set of targeted programs covering all stages of the product life cycle.
Analysis of the promotion of goods on the market allows you to adjust production volumes, sales regions, and reorient the assortment by region.
The second direction of the system is external marketing. For example, Palmira JSC is looking for partners for the supply of semi-finished products with their subsequent packaging and sale under the name of the company that owns the packaging, is following the path of developing joint products (primarily with its partners from Canada) and selling goods both in the CIS and Canada, and in third countries.
Achieving the product parameters necessary for its successful sale on the market, according to marketing research, presupposes the presence of certain social and production conditions in the company and a quality control system.
The company's marketing strategy is aimed at appropriately adapting all the company's activities to rapidly changing external factors. The marketing strategy is based on the following provisions: market segmentation; selection of marketing methods and means; timing of market entry.
Demand segmentation is based on the application of different criteria for dividing consumers into groups that have different demand for goods in terms of quality and volume.
The choice of target markets should provide the firm with opportunities to achieve its goals. At the same time, the market must be sufficiently capacious; provide opportunities for growth; not to be the object of commercial activities of competing companies; characterized by some unsatisfied needs that a given firm can satisfy.
The choice of a method of entering the market consists in resolving issues of acquiring shares of other companies, expanding one’s own production, and equity cooperation with other companies.
The choice of marketing method and means involves determining the demand for a company's entry into a specific market segment. The buyer is influenced by factors related not only to the product itself, but also to the place of sale, methods of promoting the product to the market and price.
If a company can influence the quality of a product and its price, then combinations are possible: low quality and low price; low quality and average price; average quality and average price; high quality and high price etc.
The pricing mechanism represents, on the one hand, the relationship between price and price-forming factors; on the other hand, price formation, the technology of its origin, functioning, and changes. Modeling of pricing policy is carried out in stages, in a certain sequence:
Determining the purpose of the enterprise. Along with maximizing profits, depending on the circumstances, it can come down to ensuring survival, gaining leadership, increasing market share, sales volume, maximizing growth rates;
establishing the nature of the market, which is determined by the number and size of competing enterprises: whether preferences in the market are given to any of the competitors (free competition, monopolistic competition, oligopoly, monopoly);
analysis of consumer demand. As noted, its value is influenced by various factors: the need for a product, the lack of replacement or competitors, the solvency of potential buyers, consumer preferences. The elasticity of demand is determined;
market price level research. The company positions (that is, determines the consumer's perception of its products in comparison with the products of competitors). For this purpose, comparative purchases are made, as a result of which an analysis of prices, goods, quality, etc. is carried out);
cost analysis. The company determines the dependence of total costs on changes in production volume and determines the patterns of marginal costs. At the same time, an effective approach to pricing assumes the priority of analyzing the price level that determines sales volume, production scale, and only then their relationship with costs.
An example is the activities of Japanese automobile firms. In the early 90s, workers' wages and, accordingly, production costs increased significantly. However, instead of taking the obvious path of raising prices, firms changed their entire commercial policy: they began to cut costs (including by allowing workers to retire early, moving assembly production to countries where wages are lower, etc.) . As a result, the Toyota model fell in price by 10%.
Let's consider pricing methods in mechanical engineering.
FULL (AVERAGE) COST METHOD. An enterprise on the market requests a price for goods that can recover costs and ensure the maximum possible profit based on a standard markup depending on the type of product. For example, a 20% markup is practiced on tobacco products, 34% on books, and 40% on women’s dresses. This method fits in with the existing practice of cost calculation, which also explains its preference for many domestic production structures.
At the same time, there are also significant shortcomings: a costly pricing mechanism, which causes little interest in reducing them; the competitiveness of the product decreases; weak connection with the level of demand.
MARGINAL COST METHOD- a new phenomenon in domestic practice, based on the division of costs into fixed and variable. When pricing, actual variable costs per unit of production are taken into account, which increase by the amount of marginal revenue. The purpose of the latter is to cover fixed costs and ensure an acceptable profit for the enterprise.
Its obvious advantage is a reduction in the total cost of the enterprise, which is strategically important for Russian production units with their fierce competition with foreign partners. Using the “reduced costs” option, the manufacturer, while benefiting from increased sales volume, simultaneously has the opportunity to compensate for uncovered fixed costs by increasing marginal revenue. At the same time, the use of this method is very limited due to a number of reasons: the unsettled relationship between the principles of management and tax accounting, the remaining high degree of state regulation of domestic pricing, low qualifications of the administration, etc.
SETTING PRICES BASED ON THE PERCEIVED VALUE OF THE PRODUCT. The main factor is not the costs of the enterprise, but the perception of the consumer. To achieve this, special techniques are used in the marketing and sales policies of companies, and prices are designed to correspond to the perceived value of the product. To do this, models of consumer behavior and value perceptions of buyers are studied. Non-price methods of influence are also used: after-sales service, guarantees to customers, etc.
PRICE CALCULATION BASED ON ENSURING BREAK-EVEN AND TARGET PROFIT. The company seeks to set a price that provides it with the desired amount of profit. For example, the General Motors company sets prices for its cars in such a way as to receive a 15-20% return on invested capital. Special graphs of total costs (fixed, temporary) and expected revenue are constructed for various sales volumes. The revenue curve depends on the price of the product. A combination of output volume and price is selected that provides the required profit. This pricing method requires the firm to consider various pricing options and their impact on the sales volume needed to break even and achieve target profits.
A comparison of pricing policy approaches indicates the need to get rid of passive pricing methods, increasingly intensify it in the progressive transformation of the economy of Russian enterprises, and eliminate its costly nature.
The importance of pricing in mechanical engineering
The main goal of commercial enterprises (which includes mechanical engineering enterprises) is to make a profit. The profitability of an enterprise is largely determined by its pricing policy. At different stages of the life cycle of an enterprise (and product), different subgoals are prioritized - for example, conquering the market, suppressing competitors, stabilizing income, etc. These subgoals and the position of the enterprise in the industry determine the pricing policy.
Possible connection between goals and pricing policies:
- maintaining the existence of the company in conditions of excess production capacity, intensification of the market rate, changes in supply and demand - a policy of short-term price reduction;
- maximizing profits in the short term - the priority is to make a profit as quickly as possible, the long-term perspective is not taken into account. It is usually used in conditions of instability - either economic, or when the owners of an enterprise change (the principle “after us there may be a flood”). The reduction or increase in price in such conditions is determined by demand and costs;
- maximizing turnover in the short term - the price is determined by the elasticity of demand for goods of a machine-building enterprise (if demand is elastic, prices fall, if inelastic, prices rise);
- maximizing sales volume in physical terms. It is used if there is overstocking or the company plans to change the range of equipment produced and seeks to get rid of stocks of old products. Prices are going down;
- skimming – setting high prices in the presence of serious advantages over competitors (usually used when launching new developments).
Pricing in mechanical engineering by type of product
When determining a pricing strategy, products from the engineering industry are traditionally divided into three categories:
- intended to replace previously sold products;
- similar products obtained as a result of the development of a certain parametric series;
- new products (mastered for the first time).
For the first category of products, pricing takes into account the pricing policy of competitors (producing the closest analogues, or making allowances for the advantages of their own or a competitor), as well as the cost of production and the expected rate of profit. Price revisions can be carried out when internal and external conditions change, for example, changes in prices for raw materials and supplies, tax rates, cost norms and standards, labor intensity, energy intensity and material intensity.
For the second group, the price of a previously produced model is taken as the base. Depending on changes in the parameters of the product itself, a correlation analysis is carried out, determining the relationship between changes in the cost of the product and its characteristics.
Note 1
The most difficult thing is determining prices for fundamentally new products.
If any analogues exist, then their technical and operational characteristics, operating costs, service life, etc. are compared. Often new equipment solves the same problems as existing equipment, but at a higher level (has higher productivity or is more economical to use). If new equipment replaces human labor, its productivity, expected operating costs, employee wages for producing the same amount of work, and savings from implementation are also calculated. All this information can be used as a basis when determining the cost of new equipment.
Pricing in mechanical engineering and instrument making
Tests
1. What does not apply to the features of machinery and equipment as objects of assessment?
a) a radical change in value over time;
b) no impact on the cost of associated costs;
c) low similarity of results when determining the average price level;
d) the difficulty of forecasting future income.
Answer: b) no impact on the cost of associated costs.
2. Life cycle of machines and equipment:
a) relatively long;
b) relatively short;
c) average duration;
Answer: b) relatively short.
3. To what extent does the scientific and technical process affect the cost of equipment?
a) strongly;
b) moderately;
c) has no effect.
Answer: a) strongly.
4. The market for machinery and equipment refers primarily to the market:
a) pure competition;
b) oligopolies;
c) pure monopoly;
Answer: b) oligopoly.
5. Which of the listed factors does not affect the market value of the equipment being valued?
a) the state of legislation in the field of taxation;
b) prices for similar objects;
c) investment purposes established by the owner for the use of the valuation object;
d) location of the subject of assessment.
Answer: c) investment purposes established by the owner for the use of the valuation object.
6. Which of the evaluative principles refers to the principles determined by the action of the market environment?
a) usefulness;
b) residual productivity;
c) competition;
d) expectations.
Answer: a) competition.
7. The wholesale price of the manufacturer does not include:
a) full cost;
b) entrepreneur’s profit;
c) sales allowance;
d) value added tax;
Answer: c) sales markup.
8. Machinery and equipment are most often sold at prices:
a) estimate;
b) wholesale;
c) retail.
Answer: c) retail.
9. The negotiated price differs from the announced price:
a) individual character;
b) the presence of specified conditions;
c) the presence of allowances and discounts;
d) informational secrecy.
Answer: b) the presence of specified conditions.
10. The demand curve reflects the relationship between demand and price
a) buyer;
b) manufacturer;
c) dealer.
Answer: b) manufacturer.
11. If the price exceeds the equilibrium price, then we observe:
a) shortage of goods;
b) obsolescence of the product;
c) overproduction of goods.
Answer: c) overproduction of goods.
a) requests from manufacturers;
b) inflationary processes;
c) dynamics of price changes;
d) customer expectations.
Answer: c) the dynamics of price changes.
13. The transaction price is:
a) the negotiated price between the seller and the buyer;
b) the announced price for a specific date;
c) actual transaction price;
d) book value;
Answer: a) negotiated price between the seller and the buyer.
14. What is the task of the appraiser?
a) in the formation of the transaction price;
b) in calculating the contract price between the parties;
c) in calculating the estimated cost of the transaction;
d) in detail of the price assigned by one of the parties to the transaction.
Answer: c) in calculating the estimated cost of the transaction.
15. What function do prices used to calculate enterprise performance indicators perform?
a) distribution;
b) stimulating;
c) accounting.
Answer: c) accounting.
Self-test questions
1. What features are inherent in machines and equipment as objects of assessment?
Answer: The following features of the assessment of machinery and equipment (hereinafter referred to as MO) can be highlighted:
1) Variety of names, types, modifications of MO - industry lists alone number hundreds of thousands of product names and, accordingly, the number of MO manufacturers is also large, which leads to a wide range of prices for the same product;
2) Technical progress not only changes the manufacturing technology and type of MO, but also their functional purpose. Functional obsolescence tends to accelerate; from time to time, technological revolutions occur that lead to radical changes in consumer priorities;
3) Identification and localization of cash flow attributable to MO, as an integral part of the business, is often difficult due to the complex structure of production.
2. What is the peculiarity of automated assessment of the cost of machinery and equipment?
Answer: The peculiarity of automated valuation is the construction of stochastic models of prices for machinery and equipment using the Excel computer program. Methods of correlation-regression and dispersion analysis are used to model the dependence of prices on the technical parameters of machines, as well as to build price trends.
3. What causes the radical change in the cost of machinery and equipment over time?
Answer: Radical changes in the value of machinery and equipment are caused by wear and tear. Depreciation is depreciation or obsolescence, characterizing the loss of value over time due to a decrease in its usefulness caused by technical and economic reasons: operation; long-term storage; scientific and technological progress; economic situation.
4. What difficulties may an appraiser encounter in determining the average price level when estimating the cost of machinery and equipment?
Answer: The variety of names, types, modifications of machines and equipment - industry lists alone number hundreds of thousands of product names and, accordingly, the number of manufacturers of machines and equipment is also large, which leads to a wide range of prices for the same product.
5. What associated costs are associated with the purchase of machinery and equipment?
Answer: Associated costs associated with the purchase of machinery and equipment include transportation, customs duties, installation, commissioning, repairs, etc.
6. What features of machinery and equipment are responsible for the rare use of income approach methods in their valuation?
Answer: The use of income approach methods faces the limitation when it is difficult to estimate the net income directly from the valued object due to the fact that this object does not produce final products or final services or is of greater social than economic importance.
7. What factors influence the cost of machinery and equipment?
Answer: The cost of machinery and equipment is influenced by:
a) functional indicators (productivity or power, load capacity or traction force, dimensions of the working space, accuracy class, degree of automation);
b) operational indicators (failure-free operation, durability, maintainability, storability);
c) design indicators (weight, composition of main structural materials);
d) indicators of the efficiency of machine operation (consumption of various resources during the operation of machines per unit of time and per unit of production or work);
e) aesthetic indicators and ergonomic indicators.
8.What impact do intangible assets have on the cost of machinery and equipment?
Answer: Operating software, technical data, industrial designs, patents are examples of intangible assets that increase the value of machinery and equipment
9. What causes the problem of identifying machines and equipment?
Answer: An identification problem arises when the subject property is movable property, but due to the manner in which it is installed (permanently attached to real property or used in an installed form for an extended period of time) can be classified as real property. This is most often equipment built into a building or structure and tightly connected to it (ventilation system, communications, heating and energy networks, elevators, etc.).
10. Characterize the influence of the life cycle on the cost of machinery and equipment.
Answer: Figure 1 schematically shows the dependence of price on the stage of the object’s life cycle:
Fig. 1 Life cycle influence on the cost of machinery and equipment
11. What serves as the initial basis for determining value based on the cost approach?
Answer: With the cost approach, the sum of costs for the creation and subsequent sale of an object is taken as a measure of cost, i.e. its cost.
12. How is the main pricing parameter selected?
Answer: The choice of the main pricing parameter depends on the purpose of the machine or piece of equipment: for a vehicle - load capacity, for an engine - power, for a machine - the maximum size of the workpiece, etc.
13. What is the shape of the price change curve depending on the degree of obsolescence?
Answer: curve of change in value due to physical wear and tear - Fig. 2
Rice. 2 Curve of changes in cost due to physical wear and tear of machinery and equipment
14. List the methods of direct and indirect cost determination.
Answer: Methods based on direct cost determination methods:
1) element-by-element cost calculation consists of summing up the costs of individual elements of the valuation object, as well as the costs of their acquisition, transportation and assembly, taking into account profit;
2) the method of analysis and indexation of existing calculations is to determine the cost by recalculating the original cost by summing up the indexed costs by economic elements (costs of materials, components, workers' wages and indirect costs), bringing them to the modern level;
3) the method of aggregated cost calculation is to determine the cost by calculating the full cost of production according to aggregated standards of production costs, taking into account the profitability of production.
Methods based on methods for indirectly determining costs:
1) the substitution method or analog-parametric, which is based on the principle of substitution and consists in the selection of objects similar to the one being evaluated in terms of utility and functions, which allows, based on known prices and technical and economic characteristics of analogue objects, to calculate the cost of the object being evaluated;
3) the method of specific price and economic-technical indicators, which consists in calculating the cost based on specific price indicators, i.e. price per unit of the main parameter (performance, power, etc.), mass or volume.
15. Should the associated costs associated with purchasing equipment be taken into account when determining the cost of that equipment?
Answer: When assessing machines and equipment The cost of an analogue often includes the costs of bringing the asset into working condition. These costs are often referred to as preparation costs. They often include the necessary associated costs - for design work, transportation, installation and assembly, connection to communication networks, and commissioning.
Bibliography
1. Federal Law “On Valuation Activities in the Russian Federation” dated July 29, 1998 No. 135 - Federal Law “On Valuation Activities in the Russian Federation” (as amended by Federal Laws dated December 21, 2001 No. 178 - Federal Law dated March 21 2002 No. 31 - Federal Law, dated November 14, 2002 No. 143 - Federal Law, dated January 10, 2003 No. 15 - Federal Law, dated February 27, 2003 No. 29 - Federal Law, dated August 22, 2004 No. 122 - Federal Law, dated January 5, 2006 No. 7 - Federal Law, dated July 27, 2006 No. 157 - Federal Law, dated February 5, 2007 No. 13 - Federal Law, dated July 13, 2007 No. 129 - Federal Law, dated July 24, 2007 No. 220 - Federal Law). Basic provisions.// SPS ConsultantPlus.
2. Federal assessment standard “General concepts of assessment, approaches and requirements for assessment” (FSO No. 1), approved by Order of the Ministry of Economic Development of Russia dated July 20, 2007 No. 256. Basic provisions // SPS ConsultantPlus.
3. Federal valuation standard “Purpose of valuation and types of value” (FSO No. 2), approved by Order of the Ministry of Economic Development of Russia dated July 20, 2007 No. 255. Basic provisions. // SPS ConsultantPlus.
4. Federal assessment standard “Requirements for an assessment report” (FSO No. 3), approved by Order of the Ministry of Economic Development of Russia dated July 20, 2007 No. 254. Basic provisions. // SPS ConsultantPlus.
5. GOST R 51195.0.02 - 98 Unified property valuation system. Terms and Definitions). // SPS ConsultantPlus.
6. Standard 04.21. “Evaluation of the value of movable property. Estimation of the cost of machinery, equipment and vehicles." Approved by the Decision of the Board of the Interregional Self-Regulatory Non-Profit Organization - Non-Profit Partnership “Society of Professional Experts and Appraisers” Minutes No. 21 dated October 19, 2007
7. Estimation of the cost of machinery and equipment: Textbook/Under the general editorship of V.P. Antonova - M.: Publishing house "Russian Assessment", 2007 - 254 p.
Developed competencies:
know
- what is the market for engineering products;
- what market factors have the greatest influence on the price level for machinery and equipment;
be able to
Apply various pricing methods when determining prices for machinery and equipment;
own
Methods for setting prices for engineering products in foreign trade.
Mechanical engineering market overview
Mechanical engineering is rightfully considered the country's leading industry. It is its development that reflects the level of scientific and technical potential and defense capability of Russia. Mechanical engineering determines the prospects of the industry in the world as a whole. In developed countries, this industry accounts for more than 1/3 of the total industrial output: in Japan - 50%, in Germany - 48, in Sweden - 42, in the USA - 40, in France - 38, in the UK - 36%. The Russian machine-building complex produces only about 21% of industrial products.
The social significance of mechanical engineering is determined by the fact that the complex unites about 7.5 thousand large and medium-sized enterprises and organizations, as well as about 30 thousand small ones, i.e. about 40% of the number of enterprises on an independent balance sheet in the industry. The number of employed workers in mechanical engineering is about 4 million people, which is more than 1/3 of all workers in the industry.
The mechanical engineering complex includes more than 20 sub-sectors: energy, metallurgical, mining and ore mining, hoisting and transport, railway, chemical and petroleum, tractor and agricultural, road construction and municipal engineering, diesel engineering, electrical engineering, machine tool and tool industry, intersectoral production industry , instrument making, computer technology industry, automotive, bearing industry, mechanical engineering for the light and food industries, sanitary and gas equipment manufacturing, shipbuilding, aviation industry, rocketry, arms and ammunition industry, radio and electronics industry.
In the volume of engineering production, 27.4% falls on the automotive industry, electrical engineering and instrument making - 12.3, heavy, energy and transport engineering - 10.3, chemical and petrochemical engineering - 6, mechanical engineering for the light and food industries - 2.4, for road construction engineering - 2.1, for the machine tool industry - 1.9, for tractor and agricultural engineering - 1.8, for defense engineering and other sub-sectors - over 35.
Mechanical engineering ranks second (after the fuel industry) in terms of the value of fixed industrial production assets of large and medium-sized industrial enterprises. In the structure of investments in fixed capital by industry sector of the country, the share of mechanical engineering is more than 1/3, and in the structure of investment in all sectors of the economy - more than 15%.
The industry ranks second (after the fuel industry) in terms of its contribution to the budget of the Russian Federation. The productivity of social labor, scientific and technological progress, and the material well-being of the people depend decisively on mechanical engineering. Without exaggeration, the engineering industries are called the basis of industrial production in any country. Enterprises in the industry are located in most regions of Russia, exerting a significant influence on the development of social infrastructure and the state of the regional and Russian labor markets. Also, enterprises in this industry are very closely connected with each other and with the production capacities of all other sectors of the economy.
The main tasks of mechanical engineering are to provide all sectors of the national economy with highly efficient machines and equipment; a sharp increase in the technical level, quality and con
competitiveness of products in the foreign market and achievement of advanced scientific and technical positions in the world in this area; rapid transition to the production of new generations of machines and mechanisms capable of ensuring multiple increases in labor productivity and the introduction of advanced technologies, primarily energy- and resource-saving; raising the level of mechanization and automation of all stages of production development of samples to mass production of finished products.
The formation of the machinery and equipment market in the Russian Federation dates back to the early 1930s, and to the early 1990s. the Russian machine-building complex was characterized by the largest production volumes; high share of products for defense and heavy industry; large range of manufactured products; a huge machine park, where old means of labor predominated; passive foreign trade balance of mechanical engineering products (the volume of imports was more than three times higher than the volume of exports); low indicators of labor productivity, competitiveness and low prices for machinery, equipment and vehicles compared to world price levels. The leaders were the production of machinery and equipment for the defense and heavy machinery industries.
Economic crisis in the country in the 1990s. led to a sharp reduction in the total volume of production and a curtailment of work on the creation of new types of machinery and equipment. A characteristic feature of the Russian economy has been the reduction in production volumes of the defense complex, which entailed a reorientation of enterprises in this industry to produce products that would primarily satisfy the consumer demand of the population (the so-called conversion ). In recent years, the share of small enterprises in the country's economy has increased, capable of creating only simple types of machinery and equipment, as well as their simplified modifications.
Economic crisis of 2008–2009 again had a severe impact on all indicators of the machine-building complex.
According to experts from the rating agency RIA Rating, the total growth in production in three engineering industries (machinery and equipment, electrical equipment, electronic and optical equipment, vehicles) in 2012 compared to 2011 amounted to 7.6%. This is the highest figure among all branches of the manufacturing sector.
The share of mechanical engineering enterprises in the total volume of manufacturing products in 2011 increased to 21.5% (in 2009 - 19.08%, 2008 - 20.3, 2007 - 21.8%), being far from the highest in recent years . However, this very modest level (for developed countries the “bar” is set at no lower than 35–40%) during the first half of 2011 decreased to 18.86%. In the second half of 2011, the passenger car recycling program, which was one of the main drivers of the industry in the second half of 2010 and the first half of 2011, ceased to operate.
The high rate of production growth in 2011 was due to the ongoing post-crisis recovery of the industry, increased investment demand for certain types of equipment, and growing consumer demand for household appliances, electronics and cars.
At the same time, investment demand was largely formed through the implementation of infrastructure state projects and state support for agriculture. Due to this, the production of large energy equipment, railway, agricultural and construction equipment increased at an accelerated pace.
The causes of the crisis in mechanical engineering are in many ways similar to the causes of the crisis in other sectors of the national economy. However, a number of specific features inherent only to machine-building enterprises made the crisis in machine-building the most profound and painful. These features include: a rather low level of production profitability (in Russia, the profitability of engineering products is much lower than the profitability of products in other industries and the industry average. In 2012 it was 6.8%, in the mining industry - 48.2%. At the same time, profitability in the sectors of the mechanical engineering industry changed in different directions, remaining at a low level in 2012. Return on sales in the production of electrical equipment, electronic and optical equipment amounted to 8.1 in 2012 versus 10% in 2011; vehicles and equipment - 6.0 versus 7.5%; machinery and equipment - 7.7 versus 7.0%. In addition, it is necessary to note the high level of overhead costs, energy and metal intensity of technologies, long production cycle and, as a consequence, a long period of return on investment. A machine-building enterprise also has a relatively low level of capital productivity, a high level of specialization and militarization, and a need for expensive high-tech equipment and highly qualified engineering and technical personnel.
Using the market as an example metal cutting machines it is possible to trace what changes took place in the structure of the machine park, in the financing of the production of machine tools, as well as in the pricing of machinery and equipment. Machine tool production in 2011 was 36% lower than in 2008.
Among the most characteristic changes in the production of machine tools are the following.
The country lost production capacity for the production of multi-spindle automatic lathes, as well as vertical drilling, sharpening, cylindrical grinding, gear cutting and broaching machines. In addition, production capacity for the production of components for machine tools (pumps, hydraulic motors, electric drives, chucks and other clamping devices, etc.) was sharply reduced. Machine tool industry needs modernization more than others, since without it it is impossible to fully participate in the modernization of not only the automotive industry, but also other branches of mechanical engineering. A reduction in the production of machine tools means a reduction in the output volume of almost the entire range of both engineering products and products of a number of other industries (metallurgical, chemical, etc.).
In the total production of machine tools, the share of simpler models has increased, and the development of new types of machine-tool products has decreased by more than six times. There have been changes in the structure of the metal-cutting equipment fleet. At the same time, the Russian machine tool fleet is characterized by incomplete utilization, since the volume of products produced by the engineering industry is generally decreasing, as well as by the presence of a large share of old equipment that is repaired by enterprises on their own due to the lack of funds for the purchase of new machines; a sharp reduction in the machine park, associated with the unreasonable, in some cases, sale of equipment.
Power engineering for a long time remained the most competitive industry due to the low cost of production factors compared to foreign analogues and the ability to produce unique products in accordance with customer requirements. Currently, the export potential of power engineering has decreased from 12–13% to 1.5–2%. Nuclear engineering products are mainly exported. The reason for the decline in exports is that 1/3 of all technologies used in power engineering are outdated.
Currently, new manufacturers of automobiles and large household appliances have appeared on the Russian market - subsidiaries of transnational corporations that have significant financial advantages over Russian enterprises due to the ability of parent companies to invest large amounts of money in them. Along with the automotive industry, the pre-crisis level in 2011 was surpassed in the production of electronic components, equipment for radio, television and communications. The growth in production in this industry is due to increased consumer demand and the opening of enterprises that assemble foreign consumer electronics. For example, the production of television receivers (excluding video monitors) in 2011 reached its maximum historical volume - almost 12 million units.
Meanwhile, physical wear and tear and functional obsolescence of fixed assets in mechanical engineering varies in the range of 46–53%. The disposal of fixed assets occurs at a rate of 1.5-2.5% per year, while the annual renewal rate of the technological base does not exceed 0.1-0.5%. At the same time, the share of production corresponding to fifth the technological structure that emerged in developed countries in the 1990s is only 8%.
Another negative factor is the growth in imports of machinery and equipment. According to the Federal Customs Service of Russia, imports of machinery and equipment in 2011 increased relative to 2010 by 42.5% in monetary terms. More than 1/3 of this increase was provided by the import of mechanical equipment of an investment nature. The same share of the increase was provided by means of ground transport (mainly cars).
All this gives rise to a vicious circle of problems in mechanical engineering: worn-out funds - low quality of products - low competitiveness - low sales volumes - insufficient financial turnover - lack of funds for equipment renewal. And as a consequence, there is a lack of opportunities not only for innovation, but also for maintaining production growth rates at a sufficiently high level. Investing in Russian mechanical engineering is becoming less attractive, especially in comparison with enterprises in the domestic fuel and energy complex. The volume of investments in fixed capital in the engineering industry in 2011 increased compared to 2010 by 13.1% (to 173.6 billion rubles), which is higher than the average Russian growth rate (10.4%). However, the absolute volume of investment is still low. The industry's share in the total volume of investments in fixed capital decreased compared to 2010 from 2.4 to 2.3%.
The growth in investment volumes in the production of electrical equipment, electronic and optical equipment amounted to 4.4%. In the production of machinery and equipment, investments increased by 13%; in the production of vehicles and equipment, on the contrary, they decreased by 3.8%.
Unfortunately, we have to admit that in the current state, Russian mechanical engineering enterprises can produce competitive products only for relatively narrow market segments. According to experts, no more than 50 Russian machine-building companies can compete in the relevant segments on the world market.
Separately, we should look at the state of mechanical engineering from the point of view of its impact on the economic security of the country. The following indicators are considered to be indicators of economic security in the production sector:
- 1) share in industrial production of the manufacturing industry with a threshold value of 70%;
- 2) share in industrial production of mechanical engineering – 30%.
In fact, these indicators currently exceed the threshold values and are equal to less than 50 and 20%, respectively. Of particular concern is the sharp decline in the share of high-tech products. With a threshold value for the share of new types of products in the volume of manufactured engineering products of 6%, their actual share is 2.6%.
The main systemic negative factors creating a large-scale systemic crisis in mechanical engineering include:
- degradation of fixed assets of mechanical engineering, which has reached a critical level (the actual age of the Russian mechanical engineering fleet exceeds 20 years; the share of equipment older than 15 years in the total volume of production assets in 2011 exceeded 70%);
- Russia's technological lag behind advanced countries, primarily in the machine tool industry;
- low product quality, high production costs (metal intensity, energy consumption, transportation), low production profitability and, as a consequence, lack of working capital and investment funds for development;
- rapid growth in prices for products and services of natural monopolies (the annual price index in the electric power industry is about 128%, in the fuel industries - more than 120%, while in mechanical engineering it is lower - 110%);
- lack of product standards adjusted to international requirements;
- insufficient structure of a number of industries within the machine-building complex itself;
- low competitiveness of Russian mechanical engineering products in the domestic and foreign markets and low investment attractiveness of mechanical engineering (as a consequence of the factors stated above), etc.
According to Academician S. Yu. Glazyev, nuclear engineering and rocket engineering are promising. Russia is fighting to maintain a 2% global market for civil ships and a 20% market share in military shipbuilding (it occupies a large share of the shipbuilding market in the Russian Federation). However, experts consider such forecasts to be somewhat optimistic.
Dominates in Russia fourth technological structure, which, according to experts, will reach its highest point of recovery only by 2015. In relation to Russian mechanical engineering, this means that it is necessary to overcome the gap from the world level of industry development of one and a half to two technological generations (one generation – 10–15 years), with the simultaneous formation and dissemination in the future of the most effective directions of the fifth and sixth technological structures.
Nevertheless, despite all the problems and difficulties, Russia has all the necessary conditions for the rapid development of mechanical engineering: its own energy and raw material base; scientific, intellectual, production and other potentials.
- Pelikh A. S., Barannikov M.. M. Economics of mechanical engineering / ed. prof. A. S. Pelikha. Ser. "Higher education". Rostov n/d: Phoenix, 2004. P. 5.
