1 What can we tell from the above analysis in Table 3.3 and the average DPPs per customer?

(Consider in particular the differences in DPP between the four orders shown, and between the three customers P, Q and R.) Filmco makes two thin film (gauge  12μm) products for packaging applications in the food industry. Product A is coated so that it can subsequently be printed on; product B is uncoated. There is no changeover time on the production line, because all that needs to happen is that the coating drum is switched on or off. Once produced on the film-making lines, the film is slit to width and to length to customer order.

Roughly 40 per cent of Filmco’s output is A, and 60 per cent B, and film-making takes place 360 days/year on a continuous basis because of the high capital cost of the process.

A DPP study was carried out at Filmco to determine the relative profitability of the two products A and B by major customer. The method was adapted from that shown in Table 3.1 because Filmco is a manufacturing environment.