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04 Bukit Beruang Sdn Bhd will produce two products (CV19 & SR12), each of which requires a drilling operation during processing. Two alternative types of
04 Bukit Beruang Sdn Bhd will produce two products (CV19 & SR12), each of which requires a drilling operation during processing. Two alternative types of drilling machine (T1 and X2) are being considered for purchase. For the same mual demand, the annual production requirements (machine hours) are listed in table A below. This purchase and installation cost for Tl is RM20,000 per machine, with a 4 years useful life, and may be salvaged for an estimated RM4,000. The annual maintenance cost is RM6,000 and increase RM400 every year. The machine cost for X2 is RM24,000 with 3 years useful life, and may be salvaged for an estimated RM5.200. This machine has special requirement during installation. This requirement will require small renovation at the site and is estimated to be RM 1,700. The vendor supplying this machine gave 2 option of annual cost maintenance package to the company. Package 1: RM3,700 every year and increase RM300 per year. Pulley belt also have to be replace at year 2 with cost RM280. Package 2. Free maintenance for early 2 years and only pay the annual maintenance cost RM8,000 start at year 3 till the end. The company will operate 2 000 hours per year. Machine availability is 80% for machine MYRI and 75% for machine JPN2. The yield of TI is 90%, and the yield of X2 is 80% Annual operating expenses are on a assumed operation of 2000 hours per year, and workers are paid during any idle time of machine TI or machine X2. The MARR is 10% per year. Evaluate machine should be selected with showing all your analysis to support the recommendation and state any other assumptions needed. (40 marks) Table 3. Machining Hour Information Product Machine T1 Machine X2 CV19 1.200 hours 800 hours SR12 2.250 hours 1,350 hours 04 Bukit Beruang Sdn Bhd will produce two products (CV19 & SR12), each of which requires a drilling operation during processing. Two alternative types of drilling machine (T1 and X2) are being considered for purchase. For the same mual demand, the annual production requirements (machine hours) are listed in table A below. This purchase and installation cost for Tl is RM20,000 per machine, with a 4 years useful life, and may be salvaged for an estimated RM4,000. The annual maintenance cost is RM6,000 and increase RM400 every year. The machine cost for X2 is RM24,000 with 3 years useful life, and may be salvaged for an estimated RM5.200. This machine has special requirement during installation. This requirement will require small renovation at the site and is estimated to be RM 1,700. The vendor supplying this machine gave 2 option of annual cost maintenance package to the company. Package 1: RM3,700 every year and increase RM300 per year. Pulley belt also have to be replace at year 2 with cost RM280. Package 2. Free maintenance for early 2 years and only pay the annual maintenance cost RM8,000 start at year 3 till the end. The company will operate 2 000 hours per year. Machine availability is 80% for machine MYRI and 75% for machine JPN2. The yield of TI is 90%, and the yield of X2 is 80% Annual operating expenses are on a assumed operation of 2000 hours per year, and workers are paid during any idle time of machine TI or machine X2. The MARR is 10% per year. Evaluate machine should be selected with showing all your analysis to support the recommendation and state any other assumptions needed. (40 marks) Table 3. Machining Hour Information Product Machine T1 Machine X2 CV19 1.200 hours 800 hours SR12 2.250 hours 1,350 hours
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