Document nmYLzryaqrJjmy35d6znRvM7z
^VCK4/K4M/Z7
V
Request For Capital Expenditures/Retirements
DIVISION OR COMPANY
Lyrner Product Division
-ATTo n
J.O. CONTROL POINT
Chicago Plant
097
JOB TITLE
Purchase semi bulk containers
REPORTING CLASSIFICATION
D-1
DATE APPROVED
11/13/83
JOB ORDER. NO.
PP-5916
SUMMARY OF AMOUNTS
DESCRIPTION
LO'CAL CURRENCY
U.S. DOLLARS
ESTIMATED PROJECT COST
26.461
DISMANTLEMENT EXPENSE
TRANSFER EQUIPMENT GROSS AMOUNT FOR APPROVAL
26,460
LESS TRANSFER EQUIPMENT HESS- JSALVA.GjS'iiR TRAtljiflJ 'JWLjjip
'W E,T, o ;a s R'i Fi'Ed u i r eq ' is'oii?' - a o ^
. ! L ^
26,461 1
RETIREMENT DATA
DISMANTLEMENT LESS SALVAGE
TOTAL - CHARGE RESERVE
DESCRIPTION AND REASONS REQUIRED
ECONOMICS
as called for in General Procedure Memo #3 Attachment C. (Attach calcuiotions)
ECONOMICS PERIOD
6 yr.
REVV#
1
REVISION DETAIL (g r o s s a mo u n t s )
CUM. AUTHORIZATION
NAT (P RO Ft T/ SAVINGS)
TOTAL IN VE STM ENT
% ROI (o n TOTAL INVEST.)
INTERNAL RATE OF RETURN PAYOUT OF NEW FI XED CAPITAL
14,850 26,461
56?
1.23 yr,
Funds of
are requested for the purchase of fifty (50) Air Pallets
and ten
(10) Taicon bags for shipping semi - bulk
quanities of lead stabilizers.
$26,461
Vti<UA
DESCRIPTION AND REASONS REQUIRED
PP-5916 11/13/83 Page 2 of 11
Proposed Work and Cost
Funds of
;____________________________________________ $26 f 41.00
are requested for the purchase of 50 Air Pallets and /0 Taicon bags utilized for shipping semi - bulk quantities of lead stabilizers.
CYWI 25-0007317
PP-5916 11/13/83 Page 3 of 11
PRESENT SITUATION
Approximately 20% ( 1.1 m lbs ) of the Chicago Plants stabilizer shippments for the year Jan - Sept. 1983 havebeen in air pallets or taicon bags.
Sales forecast indicate sales in the semi - bulk containers to be :
Air pallets
1.5 M lbs. / yr.
Taicon bags
.5 M lbs. / yr
Add to this a very strong possibility that Southwire will be purchasing 80k lbs/ month in taicon bags.
Both semi - bulk containers are filled to 2k lbs. net.
The plant inventory of semi - bulk containers is
Air Pallets
200
Taicon bags
60
1. See attached letter from J. Druzbacky
CYWI 25-0007318
j u s t if ic at io n
PP-5916 11/13/83 Page 4 of 11
At this writting there are no air pallets available for service
in the Chicago Plant, but we have orders for stabilizers in A/P
totaling 80k lbs. (//// A/p'* ^
tm-rJU stcr,J &
^
During the period of 9/12 - 10/4/83, 225k lbs of lead stabilizers
packed in A/P were shipped from this location. This relates to
annual sales of 3M lbs . ///^/
dem^d
Based on the 3M lb. volume (1500 A/P shipments) and a turn around time of 60 days we require: a minimum of 250 air pallets.
The plant inventory of taicon bags appears to be adequate at this time based on 500k lbs / yr (250 taicon bag shippments) and a turn - around of 90 days we require 63 units.
However, sales has indicated that Southwire will be taking 80k lbs/ ^ month in taicon bags so we should purchase 60 units to cover this cus tomer.
At this writting we are short 10 taicon bags for actual shippments. although we indicate a turn - around time of 60 - 90 days there are repeated cases of our customers holding up returns of the semi - bulk containers for 4-5 months. Me *>/// fo . r~e.s<?/><- i/e r< *et**>? . ?
^
^ (J* -fias,-*
nJ ^
rJe
MS'*-/' , ///
A <r>^
>4^ dp-4
-s&iisi/zcc/,. /xryfr, ///tS
/J/re
/%/'
f { /l/a~> 7 // <^f/?1
(TV- S/frJ
Jlf 14 rff-A
f' 7 *'r^
/o
cn-f" /O <7
Its 7
/^dUt Sidy*
7^ <^5r>'c?)" C J{A*^
CYWI 25-0007319
PP-5916 11/13/83 Page 5 of 11
Economic Justification
Customers are increasingly ordering lead stabilizers in semi-bulk Air Pallet or Taicon Bag containers. This trend is due not only to economies of scale but also to the fact that these returnable containers reduce dusting and avoid the problem of disposing of used paper bags contaminated with lead.
In the month of October, 1983, we lost orders for 52k lbs. of stabilizers due to a lack of air pallets. This represents k$17 of marginal income lost.
Plant/Marketing has determined that our inventory of semi-bulk containers should be increased from 200 Air Pallets and 60 Taicon Bags to 250 Air Pallets and 70 Taicon Bags at a cost of k$26.5.
Assuming conservatively that this investment will prevent the reoccurrence of the loss of 52k lbs. of sales twice a year, the investment has an ROI Of 55% and a payout of 1 1/4 years.
Cost: $26,461
Savings: Avoid the loss of 52k lbs. sales twice a year at $0.33 per lb. marginal income:
2 x 52k lbs. x $0.33/lb. = $34,300 increased marginal income per year.
1st Year
Other Years
Savings Less Depreciation, NBT Tax, 50% ITC, 8% NAT Add Depreciations Cash Return
20%
$34,300 (5,300) 29,000 14,500 2,100 16,600 5,300 21,900
$34,300 (5,300) 29,000 14,500
14,500 5,300
19,800
ROI ROI
Payout
6 yt. avg
, $26,461-21,900 1 $19,800
63%
56%
1.23 years
55%
N14631.01
CYANAMtD
PP-5916 11/13/83 Page 6 of 11
To: H. G. Gaffney
Date: August 23, 1983
Location: From: Location:
Chicago Plant J. S. Druzbacky Bound Brook
Copy to: R. F. Anderson J. F. Daly S. M. LuStig G. A. Menghi F. E. Rudolph
NA MG NA HO AZ
Subject: Reference:
AIR PALLET/TAICON BAG SHIPMENTS SALES PROJECTION
Attached is lead stabilizer air pallet/Taicon bag shipment forecast from field sales group. Analysis of this data should help us to determine if additional air pallets or Taicon bags are required to meet demand.
Weakness in this forecast is, of course, that we are attempting to assess and quantify a constantly moving target. Potential sales gains--particularly at Essex and BFGoodrich in 1984--could significantly upgrade need' for equipment. In addition, Tenneco (400k Ibs/yr Cyanamid supply) appears to be seriously considering switch to air pallet system for 1984.
BFGoodrich (Louisville, KY) forecast (air pallets) is based solely on SeptemberDecember 1983 estimate. 1984 Supply to BFGoodrich is still an open question with sales potential of up to one million pounds per year.
Please review forecasts and call me if you have any questions.
JSD:dk att.
AUG 2 9 WS3
NA 699 REV. 2-79,'.'f.'<' 2-79
CYWI 25-0007321
PP-5916 11/13/83 Page 7 of 1
Lead S ta b iliz e rs - A ir P a lle t Shipment (E s tim a te )
u
qj
XUJ O
QS-Ji /0-n
pH g
rH
T4u-Jl Ng--'
<
vO
<t o mo
CO CO
<ot o o "od* <of
*<r c m oo ovo
CM r--I rH i--| <f
oo
CM CM
o
Xo, da)
1--1
QJ >cd
uu qj 4-1
ud 0Q3J M o
0 O -d
r-H 0 0 cd 0 oO do g dg
d CM CO <2 vO
1
--- /-*S -------- - --A
00
1--0)1 pgH
<
Cc/d3 g
*
4-1
0
ucd
W qj
01--01
CCMO OCrHM CM vOO
O
4-4 a d 00 x) o o }- P*
uo co o 00
rH
CTi LO
vO
oos
ro co CO 00
00 000 oo0OO ggg -d g CO
00 00
On Os
X X. I--1 T--1 gg 4-1 4-1
d
o g
00 OO
<1- "d
0
O
g0
O
U0
g
CM CO
o
(~ O#CrHM Coi--M} o00 oCi--M1 vorHO
o 'Ci. \ oo *
-- A *vOKOs #-0<SC0f
OCO OCO
OOCM *CdM
co co CO CO CO 11 11
XJ XJ X! XJ XJ C/3 CO CO CO CO
o 00 o 00 CO 00 o o o o vO 00 CO OS CO os UO os
00 oo gg -d -d
voO ovO
1-- cd d d
<d
.|
u l V
r ., A' i
o vDA ^d
~4
CO V4
00 0) os g
iH u
6s>
QJ o
QI g
4-1
o* aj
C/3
0u o
XUG5J
u gq j
O QBJ
ig--l 4a-J
\
g
C0/3)
o
CO 00 vO 00 uo OS
CO VO uo
U
ua> ccdu OH
H H 4-1 4-1 d0 <w *
X T--} d
CO --00_ CM rH
1 CO
x*
o H
UQJ a* }-i 4o4 0u) cd 0 0) 3e
r--f
O
X 4J
0
Cad
QJ U O fc 5C
<O3
H
_Cd >0
x d
ao g*h
O 4-> cd cd
-S
/--s Mg
TJ
d
o
QdJ
XJ
e. CHJ
g"3
Q00XJ
CXOJ r> QJ
r-dHH . Pdc4d-
g o . #V d 4UH--J4 H
rv CJ rd>csd> U4--1t
o v
rcHd d g4o-1
<o3 r<
0rg4) gcd <d3
,^i A g*ra4 u XJ
o o
oX,
S ri*--HQHJl >0r4 gOd
W P3
C| g 4o-1 g*oH S-i XPQJhJ
r.
XQOOJJO ir--QHHJ1
Q igP--0aQHJi
>0 gU C4c-OdJ
<Is3
s
XrHJ ggoa
rXHJ *QHJ 40-i d
d0H)
cd
s
PU
rgQHJ ocd
1r--QHHJ1
X40-31) 44>0--1J
H
gd
pOH
CO
1
gX CQO
CO CCMO 00
N14631.02
CYWX
o\o
to
o
CM r CO-
CTV CM
oo r^ ro
w rH
CM
O 00
00 CM 00
i
CD rH --'
PP-5916 11/13/83 Page 9 of 11
COMMERCIAL FACTORS
to
3 00
O
i--l i--l
oY> ^J4
0
to g
its o
o to 13 pH <u N PI H fid i--1 s H H X5 o
(C . cx
-p to s CO-
(0 <u 1--1
o 00
* CM
p o 4H
-p
<D oo
Co r-
'a 3
CO- VXD h.
Xi
-p CO
gw
r8 PI
pH fid
& CO
OS w
o. in
to
,Q rH
in K
p CO
p
o a,
a,
3
to
to
p I--( p
<S) rH OJ
03 w (0 N
P A H
0 rH -P rH
dJ -H
to tnxj n H CO- T3 its oo
G 3 -P OC
EH
^
Cd CO >H
1 in
,--,
CM i--1 00 i--1
h --
i--!
t"CM H' r-
(N
r-~ m r-~
st1
to rH P d) HOC (0 N -H
H C i--I i--1 to (0 -H -P XJ 3 XI to -P 4J IS P C O -p -H O fid co mh E
CD t-i--!
-P to P H to h h x:
P d) G CO O pe G
xs a)
P G H *H PI G
i CYWX 25-0007323
DETAILS OF PROPOSAL
We propose to purchase: 50 heavy duty base - 35 ft^ capacity air pallets @ 60 35 ft^ taicon bags @
23,091 16,600
PP-5916
11/13/83 Page 10 of IJ
CYWI 25-0007324
PP-5916 11/13/83 Page 11 of 13
PRODUCTION FACTORS
This proposal will not alter product output, quality or cost, but will assure meeting of shipping schedule and maintain our share of the stabilizer market.
CONTINGENT -.......
FUTU: RE
COMMITTMENTS
t
Additonal A/P and Taicon bags will be purchased in the future J>f sales increase or to replace damaged units.
ALTERNATIVE CONSIDERED
No alternatives acceptable if we are to continue in this business.
RISK
No operating risk involved.
CONCISE SUMMARY
Purchase 50 semi - bulk air pallets and 60 taicon bags to supplement the current inventories of 200 and 60 which will allow the plant to meet sales commitments .
CYWX 25-0007325