CPP Cost Management & Economics Flashcards
6 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CPP Cost Management & Economics flashcards as text
A packaging cost reduction initiative that reduces material gauge must also verify what before implementation?
Answer: That performance specifications such as stacking strength and barrier properties are still met
Reducing gauge lowers material cost but can compromise structural and barrier performance, so validation testing is mandatory before cost-driven downgauging proceeds.
What is the primary purpose of a packaging cost benchmark study?
Answer: To compare a company's packaging costs against industry peers or best-in-class standards to identify savings opportunities
Benchmarking packaging costs against industry standards reveals where a company overpays relative to peers, directing cost reduction efforts to the highest-impact areas.
In packaging economics, 'landed cost' includes which elements?
Answer: Purchase price plus freight, tariffs, insurance, and handling charges to bring materials to the facility
Landed cost captures every expense incurred to get a packaging material from the supplier's facility to the buyer's receiving dock, enabling true cost comparisons across suppliers.
Which analysis helps a packaging manager decide the most cost-effective fill level for a corrugated shipping case?
Answer: Cube utilization analysis comparing case dimensions to product dimensions and packing pattern
Cube utilization analysis matches case inner dimensions to product footprint and height to maximize the number of units per case and minimize wasted space and freight cost.
When packaging costs rise due to a commodity material price increase, which strategy provides the fastest short-term relief?
Answer: Negotiating a material cost hedge or forward contract with the supplier
Forward contracts or price hedges lock in current material costs for a defined period, providing immediate budget certainty against short-term commodity price volatility.
A 'cost-per-thousand' (CPM) metric in packaging is most commonly used to compare what?
Answer: The unit cost of printed labels, cartons, or flexible packaging when ordered in large volumes
CPM (cost per thousand) normalizes pricing across different order quantities and formats, enabling apples-to-apples comparison of print and converting costs between suppliers.