Rate of Profit Solution

STEP 0: Pre-Calculation Summary
Formula Used
Maximum Profit Rate = (Amount Received for each Component-Production Cost of Each Component)/Average Production Time
MPR = (S-Cpr)/tp
This formula uses 4 Variables
Variables Used
Maximum Profit Rate - Maximum Profit Rate is the efficiency rate of the product obtained in metal cutting.
Amount Received for each Component - Amount Received for Each Component is the amount of money the machine shop receives for machining each component.
Production Cost of Each Component - Production Cost of Each Component is the total amount that it takes to produce a single component from scratch.
Average Production Time - (Measured in Second) - Average Production Time is the time taken to produce a single component out of a lot of produced batches.
STEP 1: Convert Input(s) to Base Unit
Amount Received for each Component: 20000 --> No Conversion Required
Production Cost of Each Component: 15000 --> No Conversion Required
Average Production Time: 18 Minute --> 1080 Second (Check conversion here)
STEP 2: Evaluate Formula
Substituting Input Values in Formula
MPR = (S-Cpr)/tp --> (20000-15000)/1080
Evaluating ... ...
MPR = 4.62962962962963
STEP 3: Convert Result to Output's Unit
4.62962962962963 --> No Conversion Required
FINAL ANSWER
4.62962962962963 4.62963 <-- Maximum Profit Rate
(Calculation completed in 00.020 seconds)

Credits

Created by Kumar Siddhant
Indian Institute of Information Technology, Design and Manufacturing (IIITDM), Jabalpur
Kumar Siddhant has created this Calculator and 400+ more calculators!
Verified by Parul Keshav
National Institute of Technology (NIT), Srinagar
Parul Keshav has verified this Calculator and 400+ more calculators!

10+ Maximum Efficiency Calculators

Amount Received by Machine Shop given Profit Rate
Go Amount Received for each Component = (Maximum Profit Rate*Average Production Time)+Production Cost of Each Component
Production Time per component given Profit Rate
Go Average Production Time = (Amount Received for each Component-Production Cost of Each Component )/Maximum Profit Rate
Cost of Production given Profit Rate
Go Production Cost of Each Component = Amount Received for each Component-(Maximum Profit Rate*Average Production Time)
Rate of Profit
Go Maximum Profit Rate = (Amount Received for each Component-Production Cost of Each Component)/Average Production Time
Amount Received by Machine Shop given Profit per Component
Go Amount Received for each Component = Profit per Component+Production Cost of Each Component
Cost of Production given Profit per Component
Go Production Cost of Each Component = Amount Received for each Component-Profit per Component
Profit per component produced
Go Profit per Component = Amount Received for each Component-Production Cost of Each Component
Profit per Component produced given Profit Rate
Go Profit per Component = Average Production Time*Maximum Profit Rate
Production Time per component given Profit
Go Average Production Time = Profit per Component/Maximum Profit Rate
Rate of Profit given Profit Per component
Go Maximum Profit Rate = Profit per Component/Average Production Time

Rate of Profit Formula

Maximum Profit Rate = (Amount Received for each Component-Production Cost of Each Component)/Average Production Time
MPR = (S-Cpr)/tp

Maximum Rate of Profit

If in a Machining Operation, Minimum Production Cost Criteria is chosen, the production time will increase. Similarly, if Minimum Production Time Criteria is chosen, the production cost will increase. To compromise between these two, the Maximum Rate of Profit is considered.

How to Calculate Rate of Profit?

Rate of Profit calculator uses Maximum Profit Rate = (Amount Received for each Component-Production Cost of Each Component)/Average Production Time to calculate the Maximum Profit Rate, The Rate of Profit is defined as the profit a machine shop makes on producing components per unit time. Maximum Profit Rate is denoted by MPR symbol.

How to calculate Rate of Profit using this online calculator? To use this online calculator for Rate of Profit, enter Amount Received for each Component (S), Production Cost of Each Component (Cpr) & Average Production Time (tp) and hit the calculate button. Here is how the Rate of Profit calculation can be explained with given input values -> 4.62963 = (20000-15000)/1080.

FAQ

What is Rate of Profit?
The Rate of Profit is defined as the profit a machine shop makes on producing components per unit time and is represented as MPR = (S-Cpr)/tp or Maximum Profit Rate = (Amount Received for each Component-Production Cost of Each Component)/Average Production Time. Amount Received for Each Component is the amount of money the machine shop receives for machining each component, Production Cost of Each Component is the total amount that it takes to produce a single component from scratch & Average Production Time is the time taken to produce a single component out of a lot of produced batches.
How to calculate Rate of Profit?
The Rate of Profit is defined as the profit a machine shop makes on producing components per unit time is calculated using Maximum Profit Rate = (Amount Received for each Component-Production Cost of Each Component)/Average Production Time. To calculate Rate of Profit, you need Amount Received for each Component (S), Production Cost of Each Component (Cpr) & Average Production Time (tp). With our tool, you need to enter the respective value for Amount Received for each Component, Production Cost of Each Component & Average Production Time and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
How many ways are there to calculate Maximum Profit Rate?
In this formula, Maximum Profit Rate uses Amount Received for each Component, Production Cost of Each Component & Average Production Time. We can use 1 other way(s) to calculate the same, which is/are as follows -
  • Maximum Profit Rate = Profit per Component/Average Production Time
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