About this calculator

Compare a measured hand-wrap baseline with a proposed machine process on the same annual pallet volume. Active labor and film costs form unit costs; incremental recurring costs reduce annual net savings.

Inputs

How to use this calculator

Proposed machine scenario

  1. Machine purchase cost (USD)Your quoted upfront price.
  2. Installation / setup cost (USD)Added to upfront capital once.
  3. Annual incremental machine cost (USD)Include maintenance, power and other extra recurring costs relative to hand wrapping.
  4. Measured machine film cost per pallet (USD)Use observed or supported consumption, not an assumed saving percentage.
  5. Active machine-process labor minutes per palletActive operator labor, not unattended machine cycle time.

Shared inputs

  1. Pallets per operating dayWhole count of comparable loads.
  2. Operating days per yearWhole count from 1 through 366.
  3. Loaded labor cost per hour (USD)Same entered labor rate for the compared active labor.
  4. Measured hand-wrap film cost per pallet (USD)Measured baseline consumable cost.
  5. Hand-wrap labor minutes per palletMeasured baseline active labor.

Enter the shipment or scenario values, then select Calculate result.

Method

Formula and variables

Annual pallets = daily pallets × operating days. Process unit cost = film cost + active labor minutes ÷ 60 × hourly cost. Annual net savings = annual pallets × (hand unit cost − machine unit cost) − incremental annual machine cost. Simple payback months = 12 × (purchase + installation) ÷ positive annual net savings. Non-positive savings has no simple payback.

Machine purchase cost (USD)
Your quoted upfront price.
Installation / setup cost (USD)
Added to upfront capital once.
Annual incremental machine cost (USD)
Include maintenance, power and other extra recurring costs relative to hand wrapping.
Measured machine film cost per pallet (USD)
Use observed or supported consumption, not an assumed saving percentage.
Active machine-process labor minutes per pallet
Active operator labor, not unattended machine cycle time.
Pallets per operating day
Whole count of comparable loads.
Operating days per year
Whole count from 1 through 366.
Loaded labor cost per hour (USD)
Same entered labor rate for the compared active labor.
Measured hand-wrap film cost per pallet (USD)
Measured baseline consumable cost.
Hand-wrap labor minutes per pallet
Measured baseline active labor.

Interpret the result

Simple payback divides upfront capital by positive annual net savings. It omits discounting and financing, and no payback is reported when savings are nonpositive.

Outputs: Unit costs, annual net savings and simple payback

A comparison under user-entered assumptions; savings are not guaranteed. No tax, discount rate, financing, salvage, downtime, throughput bottleneck or severance is modeled. Count labor savings only when economically realizable. Machine alternatives are not summed. Negative savings and no-payback results are retained.

Worked example

Check the arithmetic

This example uses the starting values shown above. The arithmetic below is calculated independently of the interactive result.

Work through the calculation

  1. Annual pallets = 40 × 250 = 10,000. Hand unit cost = 1.50 + 3 ÷ 60 × 24 = $2.70.
  2. Machine unit cost = 0.75 + 0.75 ÷ 60 × 24 = $1.05. Net annual savings = 10,000 × (2.70 − 1.05) − 500 = $16,000.
  3. Payback = 12 × (9,000 + 1,000) ÷ 16,000 = 7.5 months.

Compare the displayed result

Expected displayed result: 7.5 months

FAQs

Should machine cycle time be entered as labor time?

Enter active operator time. Unattended machine time is not automatically a paid-labor saving, and savings must be economically realizable.

Example inputs and options

Starting values are examples unless a field identifies a dated rule. Unit selectors convert only fields marked for conversion. Rates and model options keep the units and basis shown in their labels.

Machine purchase cost (USD)
Example: 9000
Installation / setup cost (USD)
Example: 1000
Annual incremental machine cost (USD)
Example: 500
Measured machine film cost per pallet (USD)
Example: 0.75
Active machine-process labor minutes per pallet
Example: 0.75
Pallets per operating day
Example: 40
Operating days per year
Example: 250
Loaded labor cost per hour (USD)
Example: 24
Measured hand-wrap film cost per pallet (USD)
Example: 1.5
Hand-wrap labor minutes per pallet
Example: 3