TABLE P6-31 Table for Problem 6-31 Machine D1 Product Machine D2 1,200 hours 2,250 hours R-43 800 hours T-22 1,550 hours 3,450 hours 2,350 hours $16,000/machine six years $5,000/machine $3,000/machine $24,000/machine eight years S7,500/machine $4,000/machine Capital investment Useful life Annual expenses Market value
A new manufacturing facility will produce two products, each of which requires a drilling operation during processing. Two alternative types of drilling machines (D1 and D2) are being considered for purchase. One of these machines must be selected. For the same annual demand, the annual production requirements (machine hours) and the annual operating expenses (per machine) are listed in the shown Table. Which machine should be selected if the MARR is 15% per year? Show all your work to support your recommendation. Assumptions: The facility will operate 2,000 hours per year. Machine availability is 80% for Machine D1 and 75% for Machine D2. The yield of D1 is 90%, and the yield of D2 is 80%. Annual operating expenses are based on an assumed operation of 2,000 hours per year, and workers are paid during any idle time of Machine D1 or Machine D2. State any other assumptions needed to solve the problem.
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