A job that quoted at 20% and delivered 8%
A 24-page A4 saddle-stitched brochure, 4/4 on 150 gsm gloss, runs 6,000 copies. The estimator quotes €8,400 ex VAT on this basis: six A3 sheets per copy, 4% running waste, six make-readies at 120 sheets each, 12 plates at €25, 12 press hours at €110, finishing at €0.175 per copy, giving a direct cost of €6,720. The actual job used seven make-readies because a plate was remade after a scratch, ran 9.5% over net sheet quantity, took 14.5 press hours, and cost €0.21 per copy in finishing after 190 copies were hand-finished for a stitching fault. The customer also withheld €300 for late delivery. There is no written spoilage standard: the estimator uses 4% because that is what the department has always used. The owner wants to know whether the job made money, what the estimate should have been, and what to change before quoting a 10,000-copy edition.
1. Reconstruct the job and quantify the variances against the estimate.
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Estimate Paper €4,050 + plates €300 + press €1,320 + finishing €1,050 = €6,720. Quoted €8,400, so planned profit €1,680 (20%).
Actual
- Sheets: 36,000 net × 1.095 = 39,420, plus 7 × 120 = 840 make-ready = 40,260 sheets. At €0.106 per sheet (the rate implied by the estimate) = €4,268. Variance +€218.
- Plates: 13 × €25 = €325. Variance +€25.
- Press: 14.5 × €110 = €1,595. Variance +€275.
- Finishing: 6,000 × €0.21 = €1,260. Variance +€210.
- Total cost €7,448, against €6,720: +€728.
- Revenue €8,400 − €300 credit = €8,100: −€300.
Result Profit €652, or 8.0% of revenue against a planned 20%. The loss of €1,028 splits into €728 of cost overrun (71%) and €300 of late-delivery credit (29%). The largest controllable item is paper, at €218 - not because the rate was wrong, but because the waste assumption was. The two remaining structural items are the extra make-ready and the press hours.
2. Rewrite the spoilage basis correctly and show what the job should have been priced at for a 20% margin.
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Why a flat 4% fails Make-ready waste is per forme and fixed: it does not shrink when the run shrinks. Running waste is proportional to net quantity and rises with coverage and with lighter stock. One percentage covering both means short runs are underprovided and long runs are overprovided - the estimator gets lucky and then unlucky.
Correct basis for this job
- Net: 36,000 sheets.
- Make-ready: 7 formes × 120 = 840 sheets (budget 7, not 6: assume one plate remake on a 4-colour job of this length).
- Running waste: 5% of net, because a 92% solid on 150 gsm gloss is set-off-prone and needs more pull checks = 1,800 sheets.
- Total: 38,640 sheets × €0.106 = €4,096.
Corrected cost Paper €4,096 + plates €325 + press €1,595 + finishing €1,260 = €7,276. Add a 5% contingency for the remake and overtime, €364 → €7,640.
Price for a 20% margin €7,640 × 1.25 = €9,550, about €1.59 per copy, against the €8,400 quoted. On a 10,000-copy edition the make-ready share per copy falls and the running-waste percentage dominates - which is precisely why the two components must be estimated separately.
3. Propose the quality-control and planning measures that would have prevented the stitching fault, the remake and the late-delivery credit.
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Before plating
- Preflight and a signed contract proof; no plates released without a signature. Plate check at 100% for scratches and imaging faults before mounting - the scratch that cost a remake is a plate-handling failure, not a press failure.
- Written spoilage standard per forme and per run length, visible in the estimate.
On press
- Signed first-off sheet retained as the run standard; density and register measured every 500 sheets on a control strip, with the readings recorded; visual check for hickeys and set-off every 250 sheets.
- Ink coverage and anti-set-off powder checked at start-up, since 150 gsm gloss with heavy coverage is where set-off appears.
Binding
- In-process inspection: stitch position, loop and clinch, page count and trim, at the start and then at fixed intervals; a simple pull test on the wire.
- Sampling to a stated plan (for example 20 copies per 1,000 with an AQL of 1.0 for major defects such as a missed stitch or a mis-trim), with the result written on the job card.
Planning
- Book press time with a 10% buffer, not the theoretical 12 hours; a schedule promise with one day of slack protects the €300 credit and the customer relationship.
- Any overtime authorised against a cost code so that the estimator sees it and prices the next edition accordingly.