Lipsocks

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  • Topic: Price, Time, UCI race classifications
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  • Published : April 9, 2013
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Lipman Bottle Company

Lipman Bottle Company is a bottle distributor in 1909 based out of Albany, New York.

1981 - Total sales $6.2 Million with $500,000 from printing operations (profit $30000) This year $450,000 – breakeven

Printing operations
Variable cost per machine hour : $14.63
Variable cost: per thousand passes : $2.63
Fixed cost : $106,944

Total capacity :$ 1 Million

Pricing Background
Lipman had more printing capacity than needed to print bottles than firm sold Price list are influenced by three major factors :
a.) Bottle size :
Sine larger bottle take longer to print and require more ware house space , price increases as bottlesize increases

b.) Quantity : each run require a setup time to load ink and silk screen to machine to print . The cost per bottle decreases as quantity increases

c.) Separations : separation mean number of individual impression required to print a single bottle

Round bottles| One separation|
Oval bottles| Two separation|
Printing prices charged by industry leaders are given

Problem:
Review firms pricing policy
He is ok with order based sizing – price decreases as ordersize increases but he is not ok with Size based pricing – price increases as ordersize increases

Cost of Set up time = cost of operation time
Set up time = 2 hours per separation

Operating time
Avg Operating time for one separation job ( semi automatic) = 0.95 per 1000 bottles

Size of 0-1ounce and 17-32 ounce = 1 hour per 1000 bottles
Other size = .9 hour per 1000 bottles

Avg operating time for Two sepration jobs: 1.1 hours per 1000 passes or 2.2 hrs per 1000 bottles

Size of 0-1ounce and 17-32 ounce = 1.2 hour per 1000 passes or 2.4 per 1000 bottles Other size = 1 hour per 1000 passes or 2 per 1000 bottles

Avg operating time for OVAL(automatic): 0.8 hours per 1000 passes or 1.6 hrs per 1000 bottles Size of 0-1ounce and 17-32 ounce = 0.88 hour per 1000 passes or 1.76 per 1000 bottles Other...
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