Question: A company needs to purchase a machine to fabricate a custom part used in its production process. Two machines from two different suppliers are currently

A company needs to purchase a machine to fabricate a custom part used in its production process. Two machines from two different suppliers are currently under consideration. The company has gathered the following information related to the machines from the two suppliers:

A company needs to purchase a machine to fabricate a

The component cost refers to the cost to replace a component on the machine after a certain number of units have been produced. For example, with Machine A, after 5000 custom parts have been produced, a component costing $200 must be replaced. The company plans to produce 110,000 custom parts annually. Conduct a total cost of ownership for the two machines.

Machine A Machine B Machine price $7500 $8000 Component cost S200 S185 Component life (units) 5000 5500 Machine life (years)

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