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Titan manufactures and sells gas-powered electricity generators. It can purchase a new line of fuel injectors  from either of two companies. Cost and savings estimates are available, but the savings estimate is unreliable at  this time. Use an AW analysis at 10% per year to determine if the selection between company A and company B changes  when the savings per year may vary as much as 40% from the best estimates made thus far.

Titan manufactures and sells gas-powered electricity generators. It can purchase a new line of fuel injectors  from either of two companies. Cost and savings estimates are available, but the savings estimate is unreliable at  this time. Use an AW analysis at 10% per year to determine if the selection between company A and company B changes  when the savings per year may vary as much as 40% from the best estimates made thus far.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Titan manufactures and sells gas-powered electricity generators. It can purchase a new line of fuel injectors  from either of two companies. Cost and savings estimates are available, but the savings estimate is unreliable at  this time.

Use an AW analysis at 10% per year to determine if the selection between company A and company B changes  when the savings per year may vary as much as 40% from the best estimates made thus far.

 

Company A Company B First cost, $ -50,000 -37,500 AOC, S per year -7,500 -8,000 Savings best estimate, $S per year Salvage, $ Life, years 15,000 13,000 5,000 3,700 5 5
Transcribed Image Text:Company A Company B First cost, $ -50,000 -37,500 AOC, S per year -7,500 -8,000 Savings best estimate, $S per year Salvage, $ Life, years 15,000 13,000 5,000 3,700 5 5
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