ILOs Measured: A1, A2, A3, B1, B2, B3, C1, C2, C3, D1, D2, D4

Case Analysis - DE Manufacturing of Computers - Industrial Engineer Performs and estimation cost.

Let us consider a case that deals with a timely and important issue concerning environmental economics. What are companies to do with all the old computers that typically accumulate at their facilities? As one possible solution to this problem, a number of states and companies have jointly established resource recovery facilities to process the handling of old electronic equipment, such as used computers. DE manufacturing of computers involves disassembly, refurbishing, and either donating or reselling the units. However, there are some residuals, or remaining components, that cannot be reused, are harmful to the environment, and contribute to the cost of DE manufacturing. Let us consider the case of one resource recovery center in the Northeast that currently handles approximately 2,000 computers per year. Of these computers, approximately 50% are refurbished and donated, 40% are remanufactured and resold, and 10% are residuals. What to do with the residuals is a challenging problem. Thefacilitycurrentlyhasacontractwithanoutsidesourcetotakethemonitors and CPUs. This leads to storage requirements in their facility, and there are issues concerning the determination of the optimal truck load capacity. The labor costs for the outside contractor are $10.00 per unit, and transportation costs are BD 1.70 per unit, for a total of BD 11.70 per unit, based on a full capacity truck load. The recovery facility is seeking an alternative solution to the handling of residuals. One alternative under consideration is to establish a method for DE manufacturing of the computers that will consider the CPUs only, since there are environmental issues associated with computer monitors. There covary facility recently completed a work measurement study to develop a method for DE manufacture of the CPUs. The method is as follows:

1. Remove fasteners or screws.

2. Remove metal casing.

3. Remove power and data cables from CD drive.

4. Unfasten CD drive.

5. Unfasten supporting bar.

6. Remove support and oppy drive.

7. Remove power and data cables from power supply.

8. Remove mother board.

9. Unfasten and remove power supply.

10. Unfasten drive housing.

11. Remove rubber feet.

From the predetermined time study, it Is determined that the DE manufacturing rate is 7.35 minutes/unit. The facility uses an internal labor rate of BD 12.00/hour, and it is estimated that training costs for the DE manufacturing method will be 10% of total labor costs. Setup costs and transportation costs are estimated at 150% and 20% of total labor costs, respectively. The facilitys goal is to DE manufacture 200 units during regular operations. Determine the estimated cost per unit for the proposed DE manufacturing method. What percentage reduction is this over the per unit cost of using the outside contractor?