Wednesday, June 24, 2009

Calculating reader/printer costs

For many years, working with information from Buyers Laboratory, Inc., LTR has suggested that the way to determine the real cost-per-copy for prints from a photocopier is to divide the cost of the machine including service contracts and other easily identified direct costs by this number of copies produced by that machine during a five year period. (Five years is an arbitrary period chosen to fully depreciate the machine.) The dividend of this calculation is then added to the cost-per-copy for ma trials only to arrive at a figure that recognizes that you can’t make copies unless you have the machine. Cost-per-copy calculations of this type are done for a range of photocopiers with the results used to select the most appropriate machine for the job to be done. It is not unusual for a machine with a high initial price to be the least expensive on a cost-per-copy basis for a very high volume user and vice versa. Similar calculations can be done with microform reader/printers to determine the real cost for r/p copies and to help in determining the most appropriate machine.

How much should a library charge for r/p copies?
The calculations outlined above could also be used to determine the price to be charged for making r/p prints. A few libraries already use this strategy for pricing photocopies and r/p copies. After determining the real cost-per-copy, these libraries set the price accordingly and retain a portion of the receipts in a sinking fund that can be used to purchase a new machine when the present machine wears out. Libraries that are able to arrange their finances in this way are not faced with large budget requests when a new machine is needed. The users also benefit by having good equipment available.

Several months ago, the editor was in contact with a college librarian who is in charge of an extraordinarily active library microform facility that provides r/p copies for less than a nickel a print. The library’s reader/printers are so heavily used that they must be replaced periodically. The charge covers the cost of supplies and little else so when the machines wear out, the replacement must be a capital expense in that year’s budget. With this volume of copying, if this library were to raise its rates only modesty it could generate enough revenue to replace the machines as they wear out. Most libraries will probably have the opposite problem-low copy volume-so that the price charged per copy will never fully pay for the machine. These calculations might be useful when trying to justify for a price increase or when trying to explain why r/p copies are more expensive than ordinary photocopiers.

Library Technology Reports
July-August, 1991, p. 413.

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