A manufacturer of machinery has recently revised many of his manufacturing and selling policies from the information obtained from a chart showing the relations of cost and selling price of his equipment to the actual size of the equipment. On the horizontal scale of charts used for this study the size of the apparatus was shown according to its actual working capacity. In a vertical direction a scale was selected for the cost of the apparatus and for its selling price. Dots were then placed on the chart in a manner similar to

200 GRAPHIC METHODS

Fig. 162, and a line was drawn on the chart through the different dots representing the factory cost of the machinery. The hne was not at all straight and the chief executive spent much time in finding out why there were so many variations from uniformity. He found, among other things, that some of his machinery had not been redesigned for several years, and that the weight of material used was much greater than necessary when taking into account the greater strength of steel and iron made by modern processes. Though materials of the modern kind were being used to a large extent in his machinery, the weight of material had not been reduced and there was more weight of employed material than was actually necessary if new designs were made. Another cause for fluctuation in the curve line Avas found in the quantities in which the product was manufactured. Some sizes of apparatus were particularly suitable to the public, and on these sizes the quantities were much larger than on other sizes. The sizes more commonly sold were naturally better equipped with jigs and tools than other sizes, and for that reason the cost was lower than would otherwise be expected. After the cost curves had been thoroughly studied for different kinds of apparatus, the sellingprice curves were drawn in on the same sheets.