2a. A food processing plant produces 9,400 McFast apple packs (each weighing 5.00 x 10 g)...
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2a. A food processing plant produces 9,400 McFast apple packs (each weighing 5.00 x 10 g) every hour. The plant production lines run 8 hours a day, 5 days a week all year (52 weeks in a year). The packs are sold to McFast at $3.75/kg. Each production day the plant receives 42,500 kg of apples from cold storage at a cost $2.12 /kg. A vender shows data that new apple peelers and corers will reduce waste by 25.0%. The costs to retrofit the entire plant with the more efficient equipment will be $2,255,728 and operating costs will not increase. Corporate will not consider capital improvements unless the simple payback period is less than 4 years. Should the company invest in the new equipment? Show all calculations and units required to derive the payback period so that a decision can be prepared. Assume 3 significant figures. 2b. Is the use of 3 significant figures correct? 2c. Provide at least three assumptions or information not provided that may result in a lower or higher payback period and explain if each will likely increase or decrease the payback period. 2a. A food processing plant produces 9,400 McFast apple packs (each weighing 5.00 x 10 g) every hour. The plant production lines run 8 hours a day, 5 days a week all year (52 weeks in a year). The packs are sold to McFast at $3.75/kg. Each production day the plant receives 42,500 kg of apples from cold storage at a cost $2.12 /kg. A vender shows data that new apple peelers and corers will reduce waste by 25.0%. The costs to retrofit the entire plant with the more efficient equipment will be $2,255,728 and operating costs will not increase. Corporate will not consider capital improvements unless the simple payback period is less than 4 years. Should the company invest in the new equipment? Show all calculations and units required to derive the payback period so that a decision can be prepared. Assume 3 significant figures. 2b. Is the use of 3 significant figures correct? 2c. Provide at least three assumptions or information not provided that may result in a lower or higher payback period and explain if each will likely increase or decrease the payback period.
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2a Current waste 25 of apples received Original apples receivedday 42500 kg Original wasteday 025 42... View the full answer
Related Book For
Operations and Supply Chain Management
ISBN: 978-0078024023
14th edition
Authors: F. Robert Jacobs, Richard Chase
Posted Date:
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