Save margin in Jaipur packaging print
Before the decision
A designer programme brought more jobs, each with fewer copies and bespoke colour changes. The designer programme won small agencies that could become repeat accounts. The production manager wants to preserve that relationship without changing colours several times in the same afternoon.
The problem
Should the team choose Pool similar jobs or Enforce minimum runs for the next 12 months?
Decision owner: The business unit lead.
Pooling is feasible only when lead times allow nearby jobs to wait.
Option economics
Scroll the table to see all figures.
| Option | Volume (runs) | ₹ per unit | Fixed cost | Net contribution |
|---|---|---|---|---|
| Pool similar jobs | 12,500 | 870 | ₹49 lakh | ₹59.75 lakh |
| Enforce minimum runs | 10,200 | 1060 | ₹39 lakh | ₹69.12 lakh |
Make the call
- Calculate net contribution for Pool similar jobs and Enforce minimum runs. Which assumption makes the comparison most fragile?
- If the leading option delivers 10% fewer runs, does your recommendation change?
- What evidence would you ask for before the team makes an irreversible commitment?
Reveal the worked solution
Start by validating Enforce minimum runs. It contributes ₹69.12 lakh after fixed costs and leads by ₹9.37 lakh. Treat that gap as the amount of unmodelled cost or lost contribution the option can absorb before the ranking reverses.
- Frame the decision
Start with price, volume, mix and cost. Reconcile the gap at the transaction or batch level before treating a forecast as an explanation of past performance.
- Calculate both options
Pool similar jobs: 12,500 runs × ₹870 less ₹49 lakh in fixed costs gives ₹59.75 lakh. Enforce minimum runs: 10,200 runs × ₹1,060 less ₹39 lakh in fixed costs gives ₹69.12 lakh.
- Stress-test the forecast
Enforce minimum runs leads by ₹9.37 lakh in the base case. If Enforce minimum runs delivers 10% fewer runs (9,180) at the same margin and fixed cost, it contributes ₹58.31 lakh. Holding the other option constant, the stressed result falls behind. This isolates volume risk. Check whether both options would respond to the same change in demand.
- Set a decision threshold
Holding the other option’s result fixed, Enforce minimum runs needs at least 9,317 runs to match or beat it under the model. Compare actual changeover savings with late-order credits and cancellations.
Pooling is feasible only when lead times allow nearby jobs to wait. Compare the cost of a limited test with the loss the business would face if the full commitment failed. Ask the team to agree the decision criterion before collecting more evidence.
What if the whole market moves?
The worked solution tests a change to one option at a time. Here, both options gain or lose the same percentage of volume. Unit contribution and fixed costs stay constant.
| Volume scenario | Pool similar jobs | Enforce minimum runs | Higher contribution |
|---|---|---|---|
| Both lose 10% of volume | ₹48.88 lakh | ₹58.31 lakh | Enforce minimum runs |
| Base assumptions | ₹59.75 lakh | ₹69.12 lakh | Enforce minimum runs |
| Both gain 10% of volume | ₹70.63 lakh | ₹79.93 lakh | Enforce minimum runs |
Explain which option you would take forward. Check whether capacity, price or customer mix would also change as the market moves.