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Packaging materials

Diepenmaat, W. (2008) Packaging materials.

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Abstract:This is a thesis report of a research conducted at a special department of Impress, namely MEET (Magazijn Emballage Expeditie Transport). MEET is responsible for the handling of packaging materials of Impress’ production departments located in the Netherlands. The goal of this research is to provide management of MEET with information about their current cost position and to identify options to reduce costs. To be able to provide management of MEET with information about their cost position, the current process and current cost price calculation were analyzed. The current process was described with the help of flow charts. The currently used cost price was calculated several years ago by an employee of Impress. Because of several shortfalls of this cost price calculation a new cost price per trip per type of packaging material was calculated during this research with the help of Activity Based Costing (ABC). With ABC costs of MEET are first linked to activities executed at MEET and via these activities to the different types of packaging materials. Data used to calculate the ABC cost prices was verified and the ABC cost price was compared with the current cost price and the current trip price. While verifying the data used in the calculation it appeared that three types of packaging materials are sensitive to changes in input-parameters. The current arrangement of activities and allocation of costs is considered reliable and valid. The second part of this research is about the reduction of costs. Per activity options to reduce costs were identified. Per identified options the yearly savings the option generates and the needed investment were calculated. For the fourteen options that generate savings the impact of the introduction of the option was also described. A difference was made between options that only have an impact on MEET and options that also have an impact on other departments of Impress or on customers. The fourteen options were ranked with the help of two investment appraisal methods. The first investment appraisal method uses as main criterion the payback period, the second the Net Present Value. The ranking of the two methods is generally the same, the main difference is that some options should not be implemented according to the payback period and should be implemented according to the NPV method. It is up to the management of MEET to decide which method is used. However, according to the theory, the NPV method is preferable to the payback period.
Item Type:Essay (Bachelor)
Clients:
Impress
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Industrial Engineering and Management BSc (56994)
Link to this item:https://purl.utwente.nl/essays/59232
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