The costs per M board feet for mechanical banding are: 



Labor $0,347 



Amortization .256 



Materials . 165 



Forklift operation . 041 



$0,809 



Labor is $0,347 per M board feet. --At 4.00 per man-hour, this productivity rate 

 represents a gross labor cost of 0.347 per M board feet. The wages assumed in this 

 example may be applicable for some operations and unrealistic for others. 



Amortization of banding machine is $0.256 per M board feet . --The average cost of 

 a banding machine, installed, is $12,500. Assuming straight- line depreciation for a 

 5-year period, the annual amortization charge is $2,500. This cost includes conveyors, 

 band and wrapping station, shed roof, and wiring. The annual banding production ranges 

 from 7.5 to 12.0 million board feet. A median of 9.75 million board feet is used, 

 which results in an amortization cost of $0,256 per M board feet. We recognize that 

 the volume banded is limited by sales and not by the production capacity of the 

 instal lation . 



Materials cost $0.165 per M board feet . --Materials costs have been obtained from 

 current price lists. Strapping material used is 3/4 X 0.025 inch, which costs 

 $0.01203 per lineal foot. A 2- by 4-foot unit requires two 12.3-foot bands. These 

 cost $0,296. Two seals are required per unit at $0,020. Thus, the total cost for 

 materials is $0,316 per unit, or $0,165 per M board feet. 



Forklift operation cost is $0.041 per M board feet . --Operating costs for a forklift 

 are $0,950 per hour. This does not include depreciation. Generally, the forklift used 

 in this part of the operation has been fully depreciated because it is a spare machine. 

 At 23 M board feet per hour, this provides a cost of $0,041 per M board feet. 



MECHANICAL WRAPPING 



The wrapping station consists of a working space on the outfeed conveyor from the 

 banding machine. The wrapping material is unspooled downward onto the banded unit from 

 an overhead storage rack and stapled around the bottom of the sides and ends. 



The wrapping operation requires two men. The banding machine operator can be one 

 of these two men depending upon the production rate desired. Because there is a 

 variable in manpower requirements that affects productivity and costs, this study shall 

 consider both situations (Alternative 1) where the banding machine operator is not used 

 in the wrapping operation, and (Alternative 2) where the banding machine operator is 

 used in the wrapping operation. 



Alternative 1 



Where the banding machine operator is not used in the wrapping operation, the 

 banding operation sets the production rate for wrapping. This has been substantiated 

 by limited time studies. 



Using this method to wrap lumber units, the cost per M board feet is 



Labor $0. 347 



Materials 0.990 ' ■ 



Machine , ; . . - - " ' 



■ ' $1,337 



3 



