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5. Javier is an IE at Lobos Manufacturing. He has been studying process line G to determine if an automated 34 system would be preferred
5. Javier is an IE at Lobos Manufacturing. He has been studying process line G to determine if an automated 34 system would be preferred to the existing labor-intensive system. If Lobos wants to earn at least 20% and uses a 15-year planning horizon, which alternative is preferred? Contributed by Paul R. McCright, University of South Florida Labor Intensive Automated Initial cost $0 $110,000 Installation cost 0 18,500 First-year O&M 2,000 4,800 Annual increase 450 950 First-year labor costs 72,000 47,500 Annual increase 5% 5% Salvage value (EOY15) 2,500 20,000
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