CPE Cost Analysis & Project Management Flashcards

A packaging engineer is asked to calculate the 'make vs. buy' decision for a custom insert. The primary financial input needed is:

Answer: Internal manufacturing cost vs. supplier quoted price including tooling amortization

A make vs. buy analysis compares all-in internal production costs against external supplier pricing including tooling, minimums, and lead time costs.

In packaging project management, a 'critical path' identifies:

Answer: The sequence of tasks that determines the minimum project completion time

The critical path is the longest sequence of dependent tasks; any delay on this path directly delays the overall project completion date.

What does a 'bill of materials' (BOM) for a packaging component capture?

Answer: Every material, component, and subassembly required to produce the finished package

A packaging BOM lists every component, raw material, and subassembly with quantities and specifications needed to build the complete packaging system.

Which cost category is often overlooked in packaging budgets but significantly impacts total packaging spend?

Answer: Packaging waste and scrap disposal costs

Packaging waste, scrap, and disposal costs during production can represent a significant percentage of total spend yet are frequently excluded from initial budget models.

A packaging project is behind schedule. A project manager proposes 'fast-tracking.' This means:

Answer: Running sequential tasks in parallel to compress the schedule

Fast-tracking compresses a schedule by performing tasks simultaneously that were originally planned sequentially, accepting increased risk of rework.

Which financial metric is most useful when evaluating a long-term packaging capital investment (e.g., new form-fill-seal equipment)?

Answer: Net Present Value (NPV) or Internal Rate of Return (IRR)

NPV and IRR account for the time value of money over the equipment's useful life, making them the standard financial metrics for capital investment decisions.