Economics of producing and handling packaged lumber economicsofprodu66host Year: 1969 However, a break-even analysis is required to determine the feasibility of instal- ling machine banding and wrapping equipment because the amortization costs in table 1 are based on a fixed annual production volume of million board feet (see page 3). If a different production volume is used, then these amortization costs will be different. Figure 3 shows that amortization costs per M board feet for the banding machine vary inversely with production volume. Under the conditions observed in this study, t
Economics of producing and handling packaged lumber economicsofprodu66host Year: 1969 However, a break-even analysis is required to determine the feasibility of instal- ling machine banding and wrapping equipment because the amortization costs in table 1 are based on a fixed annual production volume of million board feet (see page 3). If a different production volume is used, then these amortization costs will be different. Figure 3 shows that amortization costs per M board feet for the banding machine vary inversely with production volume. Under the conditions observed in this study, the break-even point between hand and machine banding occurs at million board feet annual production. Where annual banding production is not expected to equal million board feet, it is not feasible to install a semiautomatic banding machine. When further consideration is given to the combined banding and wrapping process, a different situation occurs. The break-even point for annual production volume shifts to million board feet because machine wrapping costs less than hand wrapping, as shown in figure 4. When the wrapping cost is added to its respective banding cost, the break-even point shifts to a lower annual production volume. 0 2 4 6 8 10 12 14 ANNUAL PRODUCTION (Million board feet) Figure 2.—Break-even comparison, hand vs. machine handing. 6
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