12) A manufacturing firm utilizes a manual machine to make a product. Theproduction rate is 125 parts/hr. This current method uses three operators at a labor wagerate of $18/hr. The manual machines capital operation cost (including cost of electricity)is $34/hr. The firm is considering replacing the manual machine with a programmableautomation work cell. The new cell only requires one operator, but it has a capital cost(including cost of electricity) of $95/hr. The production rate of the machine is 225 parts/hr.Perform a combined productivity analysis to determine if the firm should purchase theautomated work cell.

13) Referring to the manual manufacturing method information given in reviewquestion 12, calculate the total annual cost to produce 100,000 parts per year. Note that theannual cost of maintenance for the machine is $16,000. Additionally, the raw material costis $2.50 per part

14) A new automated method is being developed to replace the manual methoddescribed in review questions 12 and 13. The new method has a production rate of 245parts/hr, requires only one operator, and has a capital cost of $65.50/hour. Additionally,the new method decreases material waste, thereby reducing raw material costs to $1.00/ part. Because of machine sophistication, yearly maintenance costs will increase to $26,000 per year. Perform a productivity analysis to compare the two alternatives if annual production is 100,000 parts/yr. Is the proposed method more productive?Calculate the quantity breakeven point. What is total annual cost savings if the proposed method is used?