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Monday, October 5, 2020

Most of the time when you are purchasing stretch film, the cost is based on a per roll cost. Although this is an industry standard, figuring out your unit cost gives you a more accurate cost.

In order to convert your roll cost into a unit cost, first you need to figure out how much your roll weighs without a core. To do this,  take your width x length x 12 (inches/foot) x mil and divide this by 30,000 which gives you your roll weight.

 

EXAMPLE: 20” x 5000’ 80 gauge stretch film

 

20 x 5000 x 12 x .80 / 30,000= 32 # per roll

Next you would take your roll cost divided by your roll weight (above) to come up with your cost per pound.

 

EXAMPLE: Roll cost is $41.80

$41.80 / 32# = $1.31 per pound

Now that you have your per pound price, you would cut the stretch film off one of your loads/pallets and weigh it on a digital scale. This is the actual total weight of stretch film per pallet. You would take that weight multiplied by the cost per pound.

 

EXAMPLE: total weight per pallet is 8 ounces or .5 pounds

.5 x $1.31 = $ .655 per pallet

So, why is all this number crunching so important? It allows you to compare various stretch film products accurately. For example, an entry level stretch film at $1.16 per pound  requires more film per application than an expensive, high performance stretch film that requires less film per application.

 

EXAMPLE:

Entry level stretch film: $1.16 per pound x .95 ounces required = $1.10 per pallet

High Performance Stretch Film: $1.28 per pound x .65 ounces required = $ .83 per pallet

This example shows why it’s so important to understand your unit cost rather than your per roll cost. You will end up purchasing a higher quantity of the less expensive film, making your overall cost  higher than if you had purchased a lower quantity of the more expensive film to do the same job.  If you would like help analyzing this information, feel free to contact Murphy Packaging at (847) 549-1400.