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Value density/ packaging density
Value density is defined as the value of a good per pound of weight. For example,
the value of a pound of diamond which is much higher than the value of a pound of
bananas. That is the value density, two goods have same size and same weight,
but they have different values. It is used to determine a product where should be
stored and how can it shipped. It can show how important of transportation cost in
the total product cost. Therefore, firm need trade-off between inventory and
transportation cost. The products with high value density, firm can transport it in a
expensive and faster way. Although it will increase cost of transportation, compare
with the total cost of product, the transportation cost only small percentage of the
total cost. For instance, Like an 1kg of diamond which worth 1 million Euro and a
firm used the most expensive and fastest way to transportation. The transportation
cost is 500 hundred, it is only 0.05 percentage of the diamond cost. So it is doesn’t
matter and also the most expensive and fastest way mean the best service and
safety. While for products with low value density, the firm will use slow and cheap
way to transport the products. Because high transportation cost will add value to
these products, and it will effect on the price of the products. Then, it will directly
influence the profitability of products.
Packaging density is also called packing density which is the number of storage
cells per unit area, space , length of storage media. Nowadays, with the
development of technology. There are more and more packaging solutions are
came up with. Compare with conventional packaging systems, we are able to use
lightweight packaging solution that allows more cells shipped in a single box. Like
