One of the big three automobile manufacturing companies in Detroit is planning to make a capital investment of $2.00 million in a robotic welding system with 20 robots for their car assembly plant. One of the primary reasons for this investment is to improve productivity and quality of the welding process. At present, the company employs 25 workers on this assembly process. The workers are paid $30.00 per hour including benefits and work an average of 6 h during a shift of 8 h. The production rate is approximately 50 units per hour. The approximate annual maintenance cost of the manual system is $10,000.00 On the contrary, the robotic system is estimated to produce at the rate of 110 units per hour in an 8-h shift with an annual cost of $1.2 million. The operating cost of the robotic system is $100.00 per hour including a maintenance cost of $10.00 per hour for one-shift operation and $11.00 for two-shift operation.

(a) Determine the payback period for the robot system. (b) Determine the unit production costs for both systems based on one- and two-shift operation.