How To Fix The Processing Cost Of Corrugated Carton Boxes?

Product cost calculation is very important for manufacturers, and processing cost is a key point of the base product cost. As the most common packaging method in the transportation industry, How to fix the processing cost of corrugated packaging cartons?

Below is the basic formula for carton processing cost：

There is only one variable In this formula, Which is the order quantity. The machine starting fee and the processing unit price are two fixed constants.

This calculation method is similar to the pricing method of the taxi, With a $5 starting price and $1 per kilometer. In China, Most carton manufacturers will habitually use the quantity range to fix the price, For example, 1~999 unit price, 1000~2999 unit price, or more than 3000 unit price. However, I think it is not concise enough. Basically, we recommend calculating a clear starting cost and processing unit price first and then making a comparison table for segmented pricing, so that the fundamental cost structure can be controlled.

Then how do we make the cost?

Machine starting Fee

Since the time cost of order shift is almost the same regardless of the order quantity, we recommend fixing a start-up fee. Different equipment has different cost-efficiency parameters, so there will be different start-up fees. You can set up this cost according to your machine's actual situation.

The wide calculation methods of processing cost:

1. Unit Conversion: Based on the order structure of the carton factory, the average area of each carton can be calculated, Then the number of cartons can be converted into an approximate square meter per carton. According to the average price of cardboard, the area unit price can be converted into a percentage unit price. According to this idea, the unit conversion can be completed among "$/unit", "$/square meter" and "% of corrugated sheets".

2.Percentage conversion: Based on some Chinese corrugated container manufacturers accustomed to using the percentage quotation method, the percentage of processing fee usually refers to "the percentage of processing fee in the amount of cardboard". However, the percentage quotation is based on big data statistics, which is general but insufficiently targeted. However, because the percentage calculation method is helpful for measuring the overall operating data, it is widely used. If you prefer adapting this way, You can calculate the actual processing cost based on historical production, Then divide it by the amount of cardboard, So that you can get the exact percentage range to quote for similar products.

The greatest factors affecting processing cost:

There are 5 greatest factors that will impact processing cost: Fixed cost, Equipment running speed, Order shift time, order quantity, and production time. When the fixed cost and production efficiency have been determined, the number of order models and the machine running time has the greatest impact on the cost. As the order quantity increases, the unit cost varies greatly.

The effect of order model quantity and production time on unit cost can be seen in the following figure:

From this, it will be found that the relationship between "order model quantity" and "production cost" is deviated, The solution is to reduce the order shift time of equipment, which is not only related to pre-print management, order planning, and process coordination, but also to the hardware function support that the equipment can provide.

Large corrugated box manufacturers, with strong equipment investment capacity to purchase high-end machinery, and with good management, can reduce the printing order shift time to 2~3 minutes (0.04 hours). The order quantity has increased, and the change in unit cost is not prominent. This means that reducing the order shift time is a solution to the contradiction of increasing the order quantities after increasing production.

If you like my article, Please like, share, and subscribe to my channel, Thank you for your support!^^