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TESA Open Knowledge

Cost, BOM, time and team

Objectives

Section titled “Objectives”
  1. Split cost into three parts: one-time, per-unit and recurring
  2. Compute lifetime cost per unit from a hypothetical example
  3. Name the team roles needed

A note on this lesson We do not include any market prices or market statistics, because prices change quickly and vary a lot by volume and vendor. Every number in the example below is a hypothetical number, set to make the arithmetic easy; do not use it as a real price. Real prices must be obtained as quotations from vendors and contract manufacturers.

Before you start

Section titled “Before you start”
  • From the previous lesson, how does the cost of edge differ from cloud?
  • If someone asked “how much would this device cost to make?”, what do you think you would need to ask back before you could answer?

See it work first

Section titled “See it work first”

Many business owners ask the price of the parts on the board and multiply by the quantity to be made, getting a number that looks pleasing. But that number is usually only one part of the real cost. Development cost, certification testing, cloud cost, SIM card cost, and after-sales support are not in that number at all. This lesson helps you see all three parts before you set a budget.

Concepts

Section titled “Concepts”

1. Three cost buckets

Section titled “1. Three cost buckets”
Bucket English term Example items
One-time NRE (non-recurring engineering) Circuit and PCB design, firmware, an app or dashboard, data collection and model training, an enclosure mould, certification testing
Per-unit BOM (bill of materials) + assembly Chip or module, sensors, PCB, enclosure, power supply or battery, assembly, production-line testing, packaging
Recurring recurring Cloud cost, connectivity (e.g. a SIM card), security updates, customer support, warranty and unit replacement

AI adds the most cost to the one-time bucket (collecting data, labelling it, training, testing), and also adds to the recurring bucket (maintaining the model as conditions on site change).

2. A hypothetical example: a fridge-monitoring sensor

Section titled “2. A hypothetical example: a fridge-monitoring sensor”

Every number in this example is hypothetical, not a market price.

Suppose

  • One-time cost (NRE) totals THB 600,000
  • Per-unit cost (BOM + assembly + testing) THB 900
  • Recurring cost THB 120 per device per year
  • A 3-year lifetime per device

If 1,000 units are made, lifetime cost per unit = 600,000 / 1,000 + 900 + (120 x 3) = 600 + 900 + 360 = THB 1,860

If 5,000 units are made = 600,000 / 5,000 + 900 + 360 = 120 + 900 + 360 = THB 1,380

Two things to notice. First, as volume increases, the one-time cost is averaged down to a small amount, so the per-unit and recurring costs become the larger parts. Second, the three-year recurring cost in this example is almost half of the per-unit cost. If you set your selling price while forgetting this bucket, the more you sell, the more you lose.

3. Time: four stages you should not skip

Section titled “3. Time: four stages you should not skip”
  1. Proof of concept Use a development board to answer one question: “can it really measure and decide?”
  2. Prototype Closer to the real thing; start thinking about the enclosure, power and safety.
  3. Pilot Install a small number on the actual site, collect data, and learn what breaks.
  4. Production Certification testing, and setting up the production line and after-sales support.

The two stages people most often underestimate the time for are collecting real-site data for AI, and certification testing. Always ask people who have actually done these two stages how long they took.

4. The team you need (one person may cover several roles)

Section titled “4. The team you need (one person may cover several roles)”
  • Product owner Decides scope and priorities (often you)
  • Hardware Designs the circuit, the PCB, and chooses parts
  • Firmware Writes the program on the device
  • Cloud and app Receives data, stores it, displays it, and sends alerts
  • Data and AI Collects data, trains and tests the model (only for problems that need AI)
  • Test and compliance Tests quality and coordinates certification
  • Contract manufacturer (EMS) Assembles and tests on the production line, once production begins

Practice

Section titled “Practice”

Using the same hypothetical numbers, but changing the lifetime to 5 years and the volume to 2,000 units, compute the lifetime cost per unit and say which bucket is the largest (hint: 600,000 / 2,000 + 900 + 120 x 5).

Then write a list of at least three questions you would ask a vendor or contractor to turn these hypothetical numbers into real ones, for example “how much does the per-unit price differ at 1,000 versus 5,000 units?”, “which parts have only one vendor?”, “is certification testing included in the price?”

Check your understanding

Section titled “Check your understanding”

Answer the questions in quiz.yaml. A score of 80% or more passes.

Going further

Section titled “Going further”

The next lesson covers risk and compliance, much of which is cost hidden in the one-time and recurring buckets, such as radio certification testing cost and the cost of security updates for the whole life of the product.

Reflect

Section titled “Reflect”

In your project, which bucket do you know the least about, and who is the first person you should ask?

Review questions

Answer on your own first, then open the answer.

  1. Which items are one-time (NRE) costs? (choose all that apply) (Objective 1)

    1. ค่าทำแม่พิมพ์ตัวเครื่อง
    2. ค่าซิมการ์ดรายเดือน
    3. ค่าทดสอบรับรองมาตรฐานก่อนวางขาย
    4. ค่าเซนเซอร์บนบอร์ดแต่ละเครื่อง
    5. ค่าเก็บข้อมูลและฝึกโมเดลรอบแรก
    6. ค่าคลาวด์รายปี
    Show answer

    Answer: A. ค่าทำแม่พิมพ์ตัวเครื่อง · C. ค่าทดสอบรับรองมาตรฐานก่อนวางขาย · E. ค่าเก็บข้อมูลและฝึกโมเดลรอบแรก

    แม่พิมพ์ การทดสอบรับรอง และการฝึกโมเดลรอบแรกจ่ายครั้งเดียว ค่าเซนเซอร์เป็นต้นทุนต่อชิ้น ส่วนซิมการ์ดกับคลาวด์เป็นต้นทุนต่อเนื่อง

  2. Hypothetical: NRE 600,000 baht, 900 baht per unit, 120 baht per year, 3 years, 1,000 units. What is the lifetime cost per unit? (Objective 2)

    1. 900 บาท
    2. 1,500 บาท
    3. 1,860 บาท
    4. 2,460 บาท
    Show answer

    Answer: C. 1,860 บาท

    600,000 / 1,000 = 600 บวก 900 บวก 120 x 3 = 360 รวม 1,860 บาท ตัวเลขทั้งหมดเป็นตัวเลขสมมติ

  3. When volume grows from 1,000 to 5,000 units, which cost falls most per unit? (Objective 2)

    1. ต้นทุนครั้งเดียว (NRE) ที่เฉลี่ยต่อเครื่อง
    2. ต้นทุนต่อเนื่องต่อปี
    3. ค่าซิมการ์ด
    4. ไม่มีก้อนไหนเปลี่ยน
    Show answer

    Answer: A. ต้นทุนครั้งเดียว (NRE) ที่เฉลี่ยต่อเครื่อง

    NRE ถูกหารด้วยจำนวนเครื่อง ยิ่งผลิตมากยิ่งเหลือต่อเครื่องน้อย ส่วนต้นทุนต่อเนื่องต่อเครื่องไม่ได้ลดตามจำนวน

  4. Which roles does an edge AI and IoT project need? (choose all that apply) (Objective 3)

    1. เฟิร์มแวร์
    2. ฮาร์ดแวร์และ PCB
    3. ข้อมูลและ AI
    4. ทดสอบและมาตรฐาน
    5. คลาวด์และแอป
    Show answer

    Answer: A. เฟิร์มแวร์ · B. ฮาร์ดแวร์และ PCB · C. ข้อมูลและ AI · D. ทดสอบและมาตรฐาน · E. คลาวด์และแอป

    ทุกบทบาทจำเป็น คนเดียวอาจทำหลายบทบาทได้ในโครงการเล็ก แต่ต้องมีคนรับผิดชอบครบทุกเรื่อง

Cite this lesson

If you teach from this lesson or reuse it in slides or documents, credit it with the text below. If you changed it, add (adapted) after the title.

"Cost, BOM, time and team" from TESA Open Knowledge by the Thai Embedded Systems Association (TESA), https://github.com/tesaiot/tesa-qualification-program, licensed under CC BY-NC 4.0

Thai attribution: "ต้นทุน BOM เวลา และทีม" จาก TESA Open Knowledge โดยสมาคมสมองกลฝังตัวไทย (Thai Embedded Systems Association: TESA) https://github.com/tesaiot/tesa-qualification-program สัญญาอนุญาต CC BY-NC 4.0

Lesson link: https://tesaiot.github.io/tesa-qualification-program/en/courses/edge-ai-iot-for-business/m01-understand-the-options/l03-cost-bom-team/

Full guide: how to cite TESA

TESA Open Knowledge · © 2026 สมาคมสมองกลฝังตัวไทย (TESA) · CC BY-NC 4.0

Content is licensed CC BY-NC 4.0. Reuse it non-commercially and credit the Thai Embedded Systems Association (TESA) every time. · How to cite TESA