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6-10 AW and Repeatability: Perfect Together! Three products will be manufactured in a new facility at the Apex Manufacturing Company. They each require an identical
6-10 AW and Repeatability: Perfect Together! Three products will be manufactured in a new facility at the Apex Manufacturing Company. They each require an identical manufacturing operation, but different production times, on a broaching machine. Two alternative types of broaching machines (M1 and M2) are being considered for purchase. One machine type must be selected. For the same level of annual demand for the three products, annual production requirements (machine hours) and annual operating expenses (per machine) are listed next. Which machine should be selected if the MARR is 20% per year? Solve by hand and by spreadsheet. Show all work to support your recommendation. (Use Rule 2 on page 231 to make your recommendation.) Product Machine M1 Machine M2 ABC MNQ STV 900 hr 1,500 hr 1,750 hr 2,600 hr 1,000 hr 2,300 hr 4,200 hr 22,000 per machine Capital investment Expected life Annual expenses 5,850 hr $15,000 per machine five years $4,000 per machine eight years 56,000 per machine Assumptions: The facility will operate 2,000 hours per year. Machine availability is 90% for Machine M1 and 80% for Machine M12. Te yield of Machine Mi is 95%, and the yield of Machine M2 is 90%. Annual operating expenses are based on an assumed operation of 2,000 hours per year, and workers are paid during any idle time of Machine MI1 or Machine M2. Market values of both machines are negligible. 6-10 AW and Repeatability: Perfect Together! Three products will be manufactured in a new facility at the Apex Manufacturing Company. They each require an identical manufacturing operation, but different production times, on a broaching machine. Two alternative types of broaching machines (M1 and M2) are being considered for purchase. One machine type must be selected. For the same level of annual demand for the three products, annual production requirements (machine hours) and annual operating expenses (per machine) are listed next. Which machine should be selected if the MARR is 20% per year? Solve by hand and by spreadsheet. Show all work to support your recommendation. (Use Rule 2 on page 231 to make your recommendation.) Product Machine M1 Machine M2 ABC MNQ STV 900 hr 1,500 hr 1,750 hr 2,600 hr 1,000 hr 2,300 hr 4,200 hr 22,000 per machine Capital investment Expected life Annual expenses 5,850 hr $15,000 per machine five years $4,000 per machine eight years 56,000 per machine Assumptions: The facility will operate 2,000 hours per year. Machine availability is 90% for Machine M1 and 80% for Machine M12. Te yield of Machine Mi is 95%, and the yield of Machine M2 is 90%. Annual operating expenses are based on an assumed operation of 2,000 hours per year, and workers are paid during any idle time of Machine MI1 or Machine M2. Market values of both machines are negligible
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