A mathematical model for packaging cost evaluation along the supply chain

The protection and containment of products are considered the main functions of packaging. In recent years, the concept of packaging has evolved: as consumers have become more demanding, packaging become more important, assuming also a marketing role that gives to packaging an increasing relevance for both companies and customers. Regattieri et al. (2012) stated that Italian companies are interested in extending the function of packaging, improving its relationship with logistics and environmental aspects. Also Italian customers show interest in packaging quality attributes such as protection of the product, use of recyclable materials and handleability (e.g. ease of use, ease of opening, ease of dosing, etc.) (Regattieri et al., 2012). Despite the increasing importance of packaging function, companies often do not know the real impact of packaging on product costs. A study led by Regattieri et al. (2012), dealing with packaging perception of Italian companies, shows that the majority of interviewed companies, independently from the size and sector to which they belong, know either the cost of packaging, or the parameters that most greatly influence it. From a thorough literature review and the study conducted on the packaging perception of Italian companies, it is possible to underline the shortage, and the need, of tools and models evaluating total packaging costs. The authors of the paper propose a mathematical model that estimates the costs involved in packaging, taking into account the entire packaging system (primary, secondary, and tertiary packaging and accessories to support them) and the whole packaging supply chain. The model considers all the stages along the supply chain, from the purchase of the packages to the manufacturing stages and the final shipping of products. These activities have been analyzed in depth in order to develop a complete mathematical model that can be applied to companies in different sectors. The purpose of the paper is two-fold: to analyze the cost parameters of the packaging supply chain and to give to companies a practical model that allows them to analyze each parameter, understanding the potential reductions of packaging cost in order to reduce total company costs.