question archive For your factory, you wish to manufacture 30,000 electric devices
For your factory, you wish to manufacture 30,000 electric devices
Subject:Electrical EngineeringPrice:2.86 Bought3
For your factory, you wish to manufacture 30,000 electric devices. You can choose using either FPGAs or ASICs. Following information:
If you want to use FPGA technology; the initial cost you need is $6,000 and for each FPGA unit, you need to pay $200;
If you plan to use ASIC technology; the initial cost you need is $6,000,000 and for each ASIC unit, you have to pay $10.
Which design will you pick? Will you change the design if you plan to produce 3,000,000 devices? What would be the overall cost for each unit in your selections?
What would be the overall cost for each unit in your selections? Please explain your answer.
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For 30,000 units of EV, considering the cost, FPGA is cheaper than ASIC so FPGA will be chosen.
FPGA cost = $6,000 + ($200*30,000) = $6,006,000
ASIC cost = $6,000,000 + ($10*30,000) = $6,300,000
For 3,000,000 units of EV, ASIC is now cheaper so it will be chosen.
FPGA cost = $6,000 + ($200*3,000,000) = $600,006,000
ASIC cost = $6,000,000 + ($10*3,000,000) = $36,000,000
This change is due to the variable cost which is dependent on the number of units. The fixed initial cost stays the same no matter the number of units. For a lower number of units, FPGA is cheaper than ASIC. For a very large number of units, ASIC will be cheaper because of its low variable cost or price per unit.
