A Comparative Cost Model for Sheet Metal Profile Manufacturing Strategy : Break-Even Analysis of Roll Forming and Profile Bending Across Investment Levels

Sammanfattning

Today’s manufacturing companies encounter complex strategic dilemmas when making investments in production processes, due to global market demands for both cost efficiency and product variety. This thesis develops and applies a quantitative, comparative cost model to evaluate operational performance and to determine the economic break-even points between so called roll forming and profile bending, two leading technologies within the segment of sheet metal profile fabrication. Through utilising empirical research design, the model presented in this thesis integrates machine supplier data and primary operational figures in a production scenario featuring seven distinct sheet metal profile types constituting a product mix with volumes representative of yearly market demand. Both of the manufacturing technologies are analysed across three equipment investment configurations: Small, Medium, and Large. The cost modelling incorporates initial capital expenditures, variable production inputs such as material and energy, cycle-time with setup and changeover parameters, as well as inventory holding costs calculated using the Economic Order Quantity (EOQ) framework. The resulting cost curves indicate that roll forming achieves structural cost leadership only after surpassing specific volume and batch thresholds required to amortise intensive tooling assets. In contrast, profile bending provides superior economic outcomes for high-variance and low-volume portfolios by reducing inventory requirements and eliminating changeover costs. The model demonstrates that incorporating inventory carrying costs shifts the optimal batch sizes away from those that minimise production costs alone, highlighting the importance of holistic financial modelling in operations strategy. In most analysed scenarios, medium-level equipment configurations provide the most balanced and resilient cost-performance. The findings can support a structured decision framework for industrial managers, demonstrating that the optimal manufacturing strategy frequently transitions from a binary technology selection to a hybrid operational deployment. Specifically, roll forming is utilised to address standardised high-volume segments, while profile bending capacity is maintained for agile, customised variants. To further provide understanding for the economic principles behind this reasoning, the study begins by setting the industrial context of the technology and the theoretical background of Economies of Scale and Scope. Subsequent research may develop the modelling by assessing effects of various market strategies and evolving demand structures on capacity, investments, and the optimal distribution between roll forming and profile bending. Such analysis would enhance the robustness of long-term production planning.