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Durian Tunggal Sdn Bhd is evaluating two alternatives; the purchase of a semi-automatic coating system or an automatic coating system for a lorry body coating

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Durian Tunggal Sdn Bhd is evaluating two alternatives; the purchase of a semi-automatic coating system or an automatic coating system for a lorry body coating process. One person will operate the automatic coating system. However, because of manual material handling, the semi-automatic coating system require three workers to operate the system. Table 3 shows the system information. The company estimate production output is 400 units per year with expected rate of return of 12% per year. Evaluate this option with suitable graph for recommendation to the company whether to purchase a semi-automatic or an automatic coating system.SEMI AUTOMATIC AUTOMATIC COATING COATING SYSTEM SYSTEM First Cost, RM 100.000 170,000 Salvage, RM 15.000 30,000 Life, years 10 Labor Cost, RM per hour 10 16 Output, units per hour 4 Annual Maintenance Cost, RM per year 2.000 start at second year 4,000

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