One of the big three automobile manufacturing companies in Detroit is planning to make a capital investment of $2.00 million in a robotic welding system with 20 robots for their car assembly plant. One of the primary reasons for this investment is to improve produc- tivity and quality of the welding process. At present, the company employs 25 workers on this assembly process. The workers are paid $30.00 per hour including benefits and work an average of 6 h during a shift of 8 h. The production rate is approximately 50 units per hour. The approximate annual maintenance cost of the manual system is $10,000.00.

On the contrary, the robotic system is estimated to produce at the rate of 110 units per hour in an 8-h shift with an annual cost of $1.2 million. The operating cost of the robotic system is $100.00 per hour including a maintenance cost of $10.00 per hour for one-shift operation and $11.00 for two-shift operation. 

(a) Determine the payback period for the robot system. 

(b) Determine the unit production costs for both systems based on one- and two-shift operation.

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answers a Amounts Labour cost under current manual system for 880 units 88050863025 176... View the full answer