a. Executive Summary
Plastic is a highly resourceful material with many uses in everyday life. Plastics consumption has increased substantially and the demand will continue to grow. Polypropylene (PP) is a form of plastic and is a by-product of oil refining. PP is a light, highly resistant plastic resin used in packaging, coating, pipes, and tubing. PP is has a wide variety of uses and has a presence in several markets including food, pet, do-it-yourself and outdoor furniture. In the packaging market (films), PP boasts a cost efficient advantage over polyvinylidene chloride (PVdC)-coated films. According to Toray Plastics America Inc, using PP over PVdC can save as much as 10% to 25%. Market and economic conditions have a strong influence on the price of PP. Spikes in Crude Oil costs as well as short supply during high demand.
b. Individual Product Pricing Component
"Applied Extrusion Technologies, Inc. (AET) is North America's leading developer and manufacturer of highly specialized plastic films used for flexible packaging, product labeling, consumer packaging and graphic media applications" (AET Films, 2005). AET depends on polyolefin raw materials in order to manufacture oriented polypropylene (OPP) films used in production for labels, food packaging, gift-wrap, and barrier film for prolonging the shelf life of certain food items. "OPP, oriented polypropylene, is a flexible material derived from melting and orienting (stretching!) a polymer called polypropylene. This raw material, an oil by-product, is inert and unaffected by most chemical agents occurring in everyday life. It meets the requirements of the US Food and Drug Administration and other relevant authorities throughout the world. Uncoated polypropylene contains primarily carbon and hy ...