Question
Two alternatives are under consideration for a tapered fastening pin. Either design will serve the purpose and will involve the same material and manufacturing cost
Two alternatives are under consideration for a tapered fastening pin. Either design will serve the purpose and will involve the same material and manufacturing cost except for the lathe and grinder operations. Design A will require 16 hours of lathe time and 4.5 hours of grinder time per 1,000 units. Design B will require 7 hours of lathe time and 12 hours of grinder time per 1,000 units. The operating cost of the lathe including labor is 200 per hour. The operating cost of the grinder including labor is 150per hour. Which design should be adopted if 100,000 units are required per year and what is the economic advantage of the best alternative?
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