Product testing

Operation profile

Product testing, for both functionality and safety, is an essential component of bringing new products to market. In addition to the safety testing performed by regulatory agencies, many labs and testing agencies perform product testing on behalf of manufacturers. These entities may be independent labs or, alternately, may be in-house testing operations of a larger parent firm.

The representative operation modeled develops and tests electronic systems and devices, such as computer components or systems, telecommunications equipment, and electronic systems for automotive or aerospace applications. As detailed in the following table, this operation is characterized by:

  • A leased office/laboratory facility with significant investment in R&D equipment
  • A non-management workforce consisting almost entirely of professional and technical staff
  • A significant level of tax-eligible R&D activities.

The business is assumed to operate as a fully owned subsidiary of a parent firm, with revenue allocated to the business on a "cost-plus-10 percent" basis.

Summary of operating parameters

Industry: Product testing

Operation: Electronic systems development and testing

Facilities requirements
Class A office space leased - ft2 (4,181 m2)

Other initial investment requirements
   Machinery and equipment - US $'000
   Office equipment - US $'000
   R&D equipment - US $'000
   Inventory - US $'000
   Equity financing - % of project costs

   Sales and administration
   Dedicated product development
Total employees

Energy requirements
   Electricity: monthly consumption demand - kWh

Other annual operating characteristics
   Sales at full production - US $'000
   Other operating costs - US $'000
   Investment in tax-eligible R&D - % of sales

** This operation represents a cost center. For taxation purposes, corporate revenue allocated to the operation is assumed to be cost-of-operation, plus 10% markup.

International results

International results are illustrated in the following chart. These results reflect the combined impact of 26 location-sensitive cost components applied to the modeled operation. Detailed results for these countries, by individual cost component, are available as a separate table.

City results

The following table profiles results for selected cities, by country, from among the 111 cities featured in this report. Results for all other cities included in the study can be found in the Results lookup section of this website.

Results for selected cities
Industry: Product testing
Operation: Electronic systems development & testing
North America – selected cluster cities
Country and CityIndex & Rank1
CACalgary, AB72.519
 Gatineau (National Capital Region), QC70.915
 Quebec City, QC66.16
 Sault Ste. Marie, ON67.610
 Winnipeg, MB67.48
MXMexico City, DF56.42
 Monterrey, NL51.71
USAlbuquerque, NM83.847
 Boise, ID81.433
 Dallas-Fort Worth, TX93.290
 Denver, CO93.391
 Phoenix, AZ89.276
 Portland, OR91.186
 Raleigh, NC89.175
 Salt Lake City, UT85.253
 San Diego, CA99.9103
1  Rank among 111 featured cities.
International locations – all cities
Country and CityIndex & Rank1
1  Rank among 111 featured cities.

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