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MAPP Plastics Discussion Forum

The MAPP Plastic Industry Discussion Forum allows members to rapidly communicate with each other. Post both questions and answers to questions that other MAPP members have about any industry topic from material and process issues to R&E Tax Credits and other business issues.

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Plastic Industry Forum - Converse with Plastics Processing Leaders / Business / Minimum Orders
Posted:  03 Feb 2010 19:56

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We are reviewing our minimum dollar order requirement with customers. What are other custom molders doing with regard to setting a min. order value policy?
Posted:  09 Feb 2010 21:44

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We typicall do not have a minimum dollar amount per order or release.  We will generalyl set a minimum run quantity when we quote a new project. This minimum then establishes the pricing for a given quantity. We will allow the customer to place an order and schedule multiple releases with no minimum release as long as the entire quantity is released within 90 days.
For blanket orders and stocking programs we have no minimums for releases.
We review blankets and stocking programs anually to set new min max quantities based on the last years volumes.
Posted:  18 Feb 2010 15:54

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Since we deal with all custom orders, and some customers require smaller quantities, we base our minimum order on a dollar value.  This value equates to a molding trial (aka 8 hrs engineering/process validation) as with a new job.  If the calculated value of the customer's order doesn't equate to this minimum dollar value, I explain to them that we need to treat it as an engineering run, and that the cost of the run will be divided by the # of pieces ordered to determine piece price.  This way, we are not losing margin on short runs, and the customer is generally understanding of this rationale.  It's been successful for us since changing to this approach several years ago.
Posted:  18 Feb 2010 18:11

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We sell both proprietary items as well as custom items so this gets tricky.  For purely custom items, we will apply a "Lot Charge" for small quantities depending on the amount of setup time.  This includes labor and materials.  For the standard items, the actual piece price for smaller quantities is priced high enough for customer to really consider buying the next higher bracket for just a little more money.  For example, can buy 100 pieces for say 15% more than they can buy 50 pieces.
Posted:  19 Feb 2010 00:15

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We do not use an established dollar amount.  Most of the time we use a set-up fee based on machine size + auxiliaries needed and divide it out by the number ordered for low volume sample runs.  Low volume jobs that are shipped all of the time can be handled with keeping a small inventory to manage the costs.  If the customer gives us a PO and wants to order by small releases (and we know this at the start of the job), we will run enough for several orders ahead.  Inventory costs and additional paperwork should be figured in when quoting the job. 

Mike Chesebrough
Posted:  22 Feb 2010 21:21

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We do not have minimum dollar or quantity (within reason) orders. If the order is small enough that it does not pay to set up a press operator we will add additional cost for the process engineer to run the order.

John Kelly

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