SCENARIO 1 Bolts manufacturing starts with cold forging steel wire into the right shape, followed by heat treating to improve strength and surface treating to improve durability, before being packed for shipment. As one of the leading surface treating company of fasteners in Melaka, FKP Sdn Bhd is highly proficient in every step and facet of bolt coating production and the typical average yield of the production line is 75%. The Process Engineers Team responsible for the coating process in order to prevent rust and corrosion have an idea for improving overall yield (currently only 75%). They propose to improve this coating process with a redesign of one of its major components for coating thickness produced following specification given by their customer. The engineers believe the project will result in a 3% increase in the average production yield of non-defective bolt from the process. This company has only one bolt Coating Machine, and it can process 350 bolt per hour. The process engineers have determined that the Coating Machine has an average utilization rate of 80%. A good coating bolt can be sold for RM0.90. These coating manufacturing plant operate 160 hours per month, and all good coating bolt produced can be sold. The capital investment required for the project is RM23,000, and maintenance and support expenses are expected to be RM 500 per month. The lifetime of the modified components will be five years and the company uses a 12% MARR per year compounded monthly. Before implementing the proposed engineering solution, you have to write a proposal with considering following issues below; a. Evaluate the project is financially viable or not to be implemented to recover the capital investment of the project. b. In the project meetings, few of the member in the meetings are doubtful with the forecast improvement in production yield of 3% estimated by the process engineers. Prove to the top management level the percent yield improvement would the project breakeven. C. The Process Engineers team decide to ask help from their Industrial Engineers Team on increasing the output of the Coating Machine which they believe it's able to strengthen the proposal. The industrial engineers plan they are able to increase the average utilization rate of the Coating Machine from 80% to 90% with RM4500 additional cost. Analyse the projected impact of this 10% increase on the PW of the project SCENARIO 1 Bolts manufacturing starts with cold forging steel wire into the right shape, followed by heat treating to improve strength and surface treating to improve durability, before being packed for shipment. As one of the leading surface treating company of fasteners in Melaka, FKP Sdn Bhd is highly proficient in every step and facet of bolt coating production and the typical average yield of the production line is 75%. The Process Engineers Team responsible for the coating process in order to prevent rust and corrosion have an idea for improving overall yield (currently only 75%). They propose to improve this coating process with a redesign of one of its major components for coating thickness produced following specification given by their customer. The engineers believe the project will result in a 3% increase in the average production yield of non-defective bolt from the process. This company has only one bolt Coating Machine, and it can process 350 bolt per hour. The process engineers have determined that the Coating Machine has an average utilization rate of 80%. A good coating bolt can be sold for RM0.90. These coating manufacturing plant operate 160 hours per month, and all good coating bolt produced can be sold. The capital investment required for the project is RM23,000, and maintenance and support expenses are expected to be RM 500 per month. The lifetime of the modified components will be five years and the company uses a 12% MARR per year compounded monthly. Before implementing the proposed engineering solution, you have to write a proposal with considering following issues below; a. Evaluate the project is financially viable or not to be implemented to recover the capital investment of the project. b. In the project meetings, few of the member in the meetings are doubtful with the forecast improvement in production yield of 3% estimated by the process engineers. Prove to the top management level the percent yield improvement would the project breakeven. C. The Process Engineers team decide to ask help from their Industrial Engineers Team on increasing the output of the Coating Machine which they believe it's able to strengthen the proposal. The industrial engineers plan they are able to increase the average utilization rate of the Coating Machine from 80% to 90% with RM4500 additional cost. Analyse the projected impact of this 10% increase on the PW of the project
