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Packaging Alternative Analysis - Single-Use vs. Returnable Packaging Explanation of Basic Financial Model Summary This model is intended to compare basic cost differences of one way corrugated packaging verses reusable plastic packaging. The model uses basic assumptions and requires users to input various cost components into the model. While the model uses factual inputs from prospective users it is intended to be directional and not an absolute indication of exact cost benefits for a
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  Packaging Alternative Analysis - Single-Use vs. Returnable Packagi Explanation of Basic Financial Model Summary This model is intended to compare basic cost differences of one way corrugated packaging verse reusable plastic packaging. The model uses basic assumptions and requires users to input vario cost components into the model. While the model uses factual inputs from prospective users it is intended to be directional and not an absolute indication of exact cost benefits for an end user. M specific models are available to end users to determine their specific cost benefits once a directio feel for expected costs are understood. Description of Cost Inputs corrugated costs  - actual current cost of corrugated packaging for an end user dwell time  - the amount of expected time in days that a reusable packaging container is held at various stages in an end user's supply chain cartons shipped per year   - represents the annual number of corrugated containers purchased b end user in a given year annual interest rate - the end user input that is their internal hurdle rate return miles reusable packaging - represents the number of miles required to return the empty reusable packaging back for additional use replacement rate - represnts the percent estimated annual replacement required for reusable packaging  g s us ore nal y an  Purchase Price Enter your actual cost for a corrugated carton, and the cost of a comparably sized reusable container. Default values are provided.Corrugated carton$1.00Container price$7.50Enter the cost of tape or other materials used to seal each carton.Tape per carton$0.02 Total purchase cost  $1.02 Dwell Time  At your site5Safety stock2Transit days to 1st location2Days at 1st Location5Transit days to 2nd Location0Days at 2nd Location0Transit to final Location2Days at Final Location5Transit back to starting point2Processing time for RPC, cleaning etc5 Total Dwell Time  28  Turns per year  13.04  Reusables Cost Comparison Tool 2nd Distribution Center, or warehouse, if applicable.Distribution Center, for example.This model compares basic cost differences of one way corrugated packaging and reusable plastic packaging. The model uses basic assumptions and requires you to input various cost components. While the model uses factual inputs from prospective users it is intended to offer guidance and not an absolute indication of exact cost benefits. More specific models are available to determine specific cost benefits once an overall feel for expected costs are understood. Dwell time is the amount of time in days that a reusable packaging container will be held at various stages in your supply or distribution chain. In addition to time at your facility, be sure to also enter time at any distribution centers, transit time, time at the destination, and time for preparing and returning the container for reuse. All times are in full days. (Leave lines blank for rows that do not apply to your situation). Corrugated Containers in use, waiting to be used, or waiting to be shipped Reusable Handheld Container  * average values, your cost will vary  Final destination (e.g., retail store, warehouse). Includes containers in use, waiting to be emptied, queued for return. Safety Stock is an amount of excess packaging kept on hand to avoid running out at any time. If the cycle time through your supply chain is relatively predictable, your required safety stock might not be very significant. Experts recommend at least 1 to 3 days.The # of complete round-trips. As dwell time decreases, the # of round trips per year increases, resulting in better payback potential.  Volume For this example, the annual number of corrugated boxes shipped in a given year, equals the number of individual reusable containers shipped.Total number of cartons shipped per year 70,000 Total number of RPC containers shipped per year 70,000  Returnable Container Cost Per Use  Annual interest rate 4.0% Amortization years5Total reusable fleet size5,370 Total investment$40,273.97Simple interest,  Annual$322.19 Annual, principal$8,054.79Total Annual Cost$8,376.99 Total cost per trip$0.12 Return Logistics (Costs to Return Containers) Number of miles to return empty RPC to the starting point250Cost per mile used$1.75Minimum truck load600RPC per truck load4,000 Cost per truck load$600.00Return cost per RPC $0.15 NoEnter your own override reverse logistics cost here (and select yes on left):$0.00 Calculation will use this reverse logitics cost per container  $0.15 Cost per container  7% $0.04 Cost per container  Processing Cost$0.15Enter your needed internal rate of return here.This may reflect your return on investment goal, or payback target.Processing Cost:   Use the default value of $0.15 to clean and prepare returned containers for reuse, or estimate your own.Containers can last indefinitely if not lost or mishandled, but it is typical to amortize the cost over a 5 year period.This is the total quantity of containers needed in your system, based on the number of containers shipped per year and the number of turns per year. Total annual cost factoring in your internal rate of return. Enter the number of miles the empty containers will travel to return to your facility for additional use Override: If you'd like to enter your own cost for returning the containers and override these calculations, select Yes and enter the cost.Replacement Rate:    At what rate do you expect to replace lost or damaged containers annually? The Default value is 3% A typical truck load can hold 4000 RPCs, but this number depends on the size of the truck and the RPCs.
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