Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 2, Problem 21P
To determine

The amount the company can spend on the cabin refurbishments and monetary benefits related to refurbishments.

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A regional airline company estimated four years ago that each pound of aircraft weight adds $30 per year to its fuel expense. Now the cost of jetfuel has doubled from what it was four years ago. A recent engineering graduate employed by the company has made a recommendation to reduce fuel consumption of an aircraft by installing leather seats as part of a “cabin refurbishment program.” The total reduction in weight would be approximately 600 pounds per aircraft. If seats are replaced annually (a worst-case situation), how much can this airline afford to spend on the cabin refurbishments?What nonmonetary advantages might be associated with the refurbishments? Would you support the engineer’s recommendation?
Sally Statistics is implementing a system of statistical process control (SPC) charts in her factory in an effort to reduce the overall cost of scrapped product. The current cost of scrap is $X per month. If a 75% learning curve is expected in the use of the SPC charts to reduce the cost of scrap, what would the percentage reduction in monthly scrap cost be after the charts have been used for 6 months? (Hint: Model each month as a unit of production.)
If the cost of gasoline is $2.50 per gallon, how far out of your way (one way) could you afford to drive (in miles) to a service station that has gasoline at $2.25 per gallon if your vehicle gets 30 miles per gallon and you will fill up with 20 gallons of fuel? Consider only the cost of gasoline in vehicle driving cost. (Hint: Since you are going out of your way, you have to drive back the same distance.)
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