Material Cost Estimation of Newspaper Printing Process by using Multiple Linear Regression Models

Abstract

Newspaper printing industry is one of the popular industry in developing countries like Sri Lanka. Newspapers become one of the major sources of disseminating news among people. When printing a newspaper, the company has to bear a huge cost since most of the newspapers are printed on a daily basis. Labour cost, material cost, machinery cost and electricity cost are major costs involved in newspaper printing cost. Among those costs, material cost is a combination of the various types of costs. According to the industrial investigations, material cost is a combination of the amount of paper, plate and ink usage in printing, number of printed newspapers and number of pages in a newspaper. The main objective of this research is to identify the contribution of the investigated factors on the material cost. Data were taken from a popular newspaper company in Sri Lanka for a popular daily newspaper. To analyse the weekly data for the material cost the data on the selected factors of; total number of pages, amount of paper, the amount of plate and ink, total printed newspapers were taken from the period of 06th January 2013 to 05th September 2014. Multiple linear regression models were fitted to identify the factors associated with the material cost. Among them, most suitable variables for the models were identified and the model was fitted. A number of pages per newspaper, the amount of printed newspapers, paper amount (kg) and ink amount (kg) becomes the significant factors associated with the material cost of newspaper printing. The amount of the variance explained by the model is about 78%. All the assumptions in multiple linear regression models were held in this model. Therefor we can use this model to estimate the material cost for a newspaper.