Case Study1-ENGI220
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Case Study 1: Engineered Products Inc. Recycling
Rebecca Arevalo & Camden Nystrom ENGI 220
October 21, 2023
TO: Engineered Products Inc.
FROM: Engineering Group (Rebecca Arevalo & Camden Nystrom)
DATE: October, 21, 2023
SUBJECT: Recycling and disposal fee outline
Engineered Products Inc. would like to increase their recycling efforts to help decrease annual disposal fees. Currently the Company disposes of all waste material at the local landfill. The landfill is now increasing disposal fees $5 per ton, while also implementing a $5 rebate per ton of
waste less in the current year. As an engineering group, calculations have been made to make the
most cost-efficient plan for EPI moving forward.
Initial Cost Analysis
EPI currently averages 2 containers per day to the landfill, they rent 3 containers per day for $5 each. It costs $80 to haul each container to the landfill and each container holds about 10 tons of waste.
The increased cost per year without making any change to the company’s usual waste disposal was also calculated for comparison.
Cost of implementing Recycling
The cost of implementing recycling without any change to how waste is compiled without new machinery.
New machinery and operating costs
New machines for cardboard and wood are being considered for a new method of waste disposal.
The new machinery will require 3 hours of labor a day from the janitorial associate who gets paid $18.50 an hour. The baling equipment for the cardboard costs $22,000, then $45 a week to operate, and $4500 maintenance fee annually. The equipment has a life of 12 years and has a salvage value of $5000. The pallet shredder would cost $12000 and would increase volume of waste per container to 11 tons.
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Pallet Recycler A pallet recycler offers to pick up pallets that are in good condition and will pay $1.00 per pallet.
About half of the pallets that EPI gets rid of are in good condition. For this it would take 3 hours of labor everyday by the janitorial associate. Another company offers to pick up the other half of the damaged pallets and process it into wood chips themselves for $1.25 per pallet.
Best Option Proposal 1.
New machinery A cost was calculated for the use of the new machinery and how that would affect waste costs. First, we calculated the Present worth of the Cardboard and Shredder Option. We ended up getting $136.810.06 for the present worth of the cardboard and $26,854.60 for the present worth of the Shedder option assuming that we sent all 125000 planks to the Shredder.
2.
New machinery with first pallet recycler
A cost was calculated for new machinery for the carboard and for the pallets, but only for
the damaged pallets (12,500 of the total 25,000) while the good pallets are collected by a pallet company. We found that the annual cost for the recyler was $1,375 and that if we used the pallet waste pickup, we would get a total of $17,000 from both options.
To find the PW, we first used the present worth of the shredder and divided that by two because it was calculated over a 12-year period. We then added the Present worth of the Cardboard and the annual cost of using the pallet recycler which gave us a Present worth of $151,612.36. We then calculated the landfill costs resulting in the final total being $92,137.64
3.
Cardboard machinery with both pallet pickup companies
A cost was calculated for the carboard machinery and for both pallet pick up companies and no wood shedder purchased.
The best option for Engineered Products Inc. is Option B, which would be to invest in both machines for the cardboard and wood as well as use the pallet company that pays $1 for the good
pallets. The present worth calculated is $151,612.36. Which is $92,137.64 less than the current costs and expenses of Engineered Product Inc.
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