Some companies use process costing techniques to determine product mix. Process costing is a method of allocating manufacturing cost to products to determine an average cost per unit. It is used by companies which mass produce identical or similar products. Since every unit is essentially the same, each unit receives the same manufacturing input as every other unit.
Profit Optimization is a better approach. Optware Enterprise models your business by breaking it down into fundamental processes such as harvest, procurement, manufacturing processes, and markets. We then create a model that represents the activities that take place in each process. The end result is both a process model and a financial model. The Optware Enterprise System is capable of reporting costs by product and process. However, Optware treats individual activities differently in the decision process. The goal is to make the most profit within the relevant timeframe. The System looks collectively at all variable costs, semi-variable and fixed costs in the proper relative relationships in determining the best possible solution.
Steve Killgore, President, McKenzie Forest Products
“We picked up well over 35% savings in our manufacturing costs in a one year period”
Michael McCollum, President Procurement, Georgia-Pacific Corporation
“We saved 1.5-2% of total fiber costs in transportation savings alone using Optware”
Mark Shuholm, Manager, Containerboard Division, Willamette Industries
“Optimization allowed us to substantially improve our paper machine utilization across the Division”
Richard Dutchak, Engineering Manager, Loewen
“We documented wood cost savings of just under $1,000,000 in the first year of using the software”