Meaning
A calculation of the total expenditure required to produce a finished part and deliver it to the customer includes material, labor, logistics and freight. Landed piece cost arithmetic accounts for the base resin price, additive loadings, machine cycle time, and the freight charges for shipping. Understanding this figure is necessary for determining the actual profitability of a moulding project.
Material Impact
Resin and masterbatch choices are often the largest components of the total expense. While a cheaper resin might seem attractive, landed piece cost arithmetic may reveal that a higher scrap rate or longer cycle time makes it more expensive than a premium material. Calculating the cost per gram of the finished part provides a more accurate view of the production budget.
Processing Variable
Speed of production and the efficiency of the machine affect the overhead allocation. When performing landed piece cost arithmetic, the moulder must include the energy cost and the labor required for each cycle. A reduction in cycle time or an improvement in the yield can lower the final price even if the material cost remains the same.
Efficient production is not just about the price of the plastic but about how many good parts are produced in an hour and how much electricity is consumed to make them.
Logistics Factor
Freight and packaging expenses add a layer of cost that is often overlooked. The final step of landed piece cost arithmetic involves adding the storage and transport fees to the factory gate price. This total number allows a buyer to compare quotes from different regions on an equal basis to see which supplier truly offers the best value.
