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3.2 Large rotating equipment (for example, air blowers or gas compressors used in oil refining operations) requires lubrication. Given the enormous capital cost of such

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3.2 Large rotating equipment (for example, air blowers or gas compressors used in oil refining operations) requires lubrication. Given the enormous capital cost of such equipment, the lubrication system must be highly instrumented, i.e., it must have equipment shutdown links in the event of low lube oil pressure, pump failure, etc. Typically, a separate skid containing the lube oil pump and holding tank is ordered separate from the compressor or air blower You work for a small company with a staff of 20 that manufactures these products as well as oil field gas compressor skids. The company does not code its labor to specific projects, since labor moves around the shop floor from jo be too inaccurate to be of value. However, component parts are tracked and coded to each product skid. Over the last five years, margin based on COGS of component parts has run at only 32%, ie COGS (component parts) has run at 68% Also, tracking the number of hours on each skid proved to A pipeline company that is building a major expansion has requested a budgetary quote (in essence, an indication price that will be used by the pipeline company to prepare its investment analysis, which may influence whether the company is asked to prepare a formal bid in the future) The requested quote is for one lube oil skid that is twice the capacity of any unit built before in the shop. The pipeline company indicates that they may require 20 such units (two at each of 10 compressor stations along the new pipeline). An engineer in the company has priced components at $356,000 What do you give as a budgetary quote? What reservations would you have about the accuracy of the quote? Is it at more risk of being too high or too low? Why? Can you think of questions you would ask the enginee

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