Hi All, this is my first post and I'm not an accountant, I'm an engineer that owns a manufacturing company catering to the aerospace industry. I'm looking for a metric and I'm not sure what it would be called and I'm not sure if it even exists. Basically I'm trying to determine the cost associated with the amount of time a part of project spends in the manufacturing process including manufacturing, outside processing (OSP), and payment terms. In short, if I have part A that we make for $1000 and the entire process takes a week and we are paid within 30 days of commencement of the project, how would I compare that to part B that we make for $1000 and the process takes a week, it spends a month at OSP, then it takes another 60 days to get paid? With all other factors being equal such as raw materials cost, labor and shipping costs, etc... How would I determine the cost of the additional 90 days in the payment cycle for part B? Clearly part B would have a significant impact on cash flow and subsequently our growth rate. We are getting busy and I'm looking for a way to pick the winners from the losers if we don't have the capacity to take on everything. Thanks for any help you can offer!
Bob
Bob