Download - Packaging Cost
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PACKAGINGCOST
BYBYC.S.PURUSHOTHAMANC.S.PURUSHOTHAMAN
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SCOPE1. Cost?2. Packaging Cost?
3. Components?4. Examples5. Exercises
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COST
Sacrifice, measured by the price paid / to bepaid , to acquire, produce, or maintain goods or
services. Prices paid for materials, labor, andfactory overhead in the manufacture of goods
are costs
Cost is the value that must be given up toacquire a good or service
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PACKAGING COST
Packaging Cost is the costcomprising of all aspects of packaging at all
levels of its application
Pkg Material Manufacturer Pkg Material Converter
Pkg Material User
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PACKAGING COST
Pkg Material User
Pkg Material Pkg Process
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INDUSTRY TREND
Contribution of packaging cost to the overall costcan vary considerably.
Variation can be from 1% to 80 % or more
Hence, packaging cost needs to be evaluated interms of how good packaging can lead tooptimisation of other cost parameters.
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INDUSTRY TREND
Aerosols 80 %
Beer 30 %Chips 15%Hosiery 10%Cigarettes 4 %
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COMPONENTS
MaterialDevelopment
Machinery DepreciationL abour Margin
In todays scenario Material is almost 75 % to 85 % & Margin is 10% to 15%
Companies survive on volumes
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EASY METHOD
Basics of PACKAGE (MATERIA L S CONSUMED)Material RATESPercentage of Material to Labour Margin POSSIBLE (DEPENDING ON MARKET TREND)
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EASY METHOD
Find the cost of CFB BOX of 500g weight, whenmaterials cost is Rs.24/Kg.
Find the cost of B/M bottle of 60g, whenmaterials cost is Rs.80/Kg.
Find the cost of I/M bottle of 6g, when materialscost is Rs.85/Kg.
Find the cost of PET/poly ( 10/75 ) laminatepouch of 2g (84GSM ), when materials cost isRs.95/Kg.
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cfb costinggsm percen rate cost/kg
paper 1000 94.34 22 20.7548
adh 60 5.660377 2 0. 11 32
1060 100.00 20.868labour 0.2 4. 1736
25.04 16
margin 0. 15 3.75624
28.797840.5 Kg 14.39892
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b/m bottleweight percen rate cost/kg
hdpe 1000 99 80 79.2
master 10 1 200 2
1010 8 1.2
labour 0.25 20.3
101.5
margin 0. 12 12. 18
11 3.68
0.06 Kg 6.8208
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I/m capweight percen rate cost/kg
hdpe 1000 99 85 84. 15master 10 1 200 2
1010 86. 15labour 0.25 2 1.5375
107.6875
margin 0. 15 16. 153 13123.8406
0.006 Kg 0.743044
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laminated pouch
gsm percen rate cost/kg
pet 14 16.66667 11 0 18.33333
poly 67.5 80.357 14 80 64.2857 1
ad/ink 2.5 2.976 19 400 11 .9047684 100 94.5238 1
labour 0.25 23.63095
11 8. 1548
margin 0. 1 11 .8 1548
129.9702
2g pouch 25.5ps
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W HAT YOU NEED TO KNO W TOESTIMATE PACKAGING COST?
Basics of PACKAGE (MATERIA L S CONSUMED)Material RATESConversion PROCESSProduction RATES (EFFICIENCY/PROCESS L OSS)Production CONSUMABLESLabour REQUIREMENT (ALL L EVE L S)
Labour RATESMargin POSSIBLE (DEPENDING ON MARKET TREND)
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REVISIONEXERCISES
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Your Company has introduced a new Cough syrup in 5ml sachets strips.Each empty sachet weighs 1.2g. The cost of laminate is Rs. 150/Kg.1000 sachets in strips of 20 are packed in a corrugated box. The weightof the corrugated box is 600g. CFB Box cost at Rs. 30/Kg.Each corrugated box has to be taped with 2 width printed BOPP tape. Eachbox uses 2 meter of tape. Each BOPP Tape roll has 65meters and is costing
Rs.25 each.
Your Managing Director informs you that your company has bagged aprestigious export order from Philippines for 10million sachets and has askedyou to estimate the total packaging material requirement and cost for thisorder.
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SUMMARY
Material QTY Cost(Rs. L akhs)
L aminate 10% safety margin 13.2 Tonnes 19.8
CFB Box 2%safety margin 10,200 nos 1.836
BOPP Tape 1% safety margin 5,706 rolls of 65mt 1.42643
TOTA L 23.06243