Slitter Rewinder: Chapter 28
Economic Analysis: Reasons for deciding to buy a used slitter rewinder:Actually, it is quite easy to determine whether you need a new slitter rewinder or not.
Let's say that the old faithful clunker of a slitter that you presently use generates a 100 rolls a day. As per our last example, we also see that the converting plant is generating a decent profit. We have already gone through the accounting analysis of hiring a new salesman.
Now let's examine how we can increase our production. Any increase in production will have a direct bearing on the bottom line. Since no new man-power is to be added to the staff, everything else will remain constant. Your operating costs, rent, heat , light etc will stay the same. Any increase in production will increase the net profit figures.
A mere 10% increase in production will have a dramatic effect on the net profit figure. This slight increase in production can actually double your net profit! look at the advantages of doing this. There has been no increase in costs. Your total expenses have remained the same, but your profits have doubled.
This is a no-brainer. Yet, I come across companies all the time that have blinders on and are utterly oblivious to this simple fact. CHS is missing.
By buying a new slitter rewinder ( a used machine will do nicely, thank you) that produces 10 more rolls a day versus your old slitter rewinder, you have doubled your profits.
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