In Response to the New Federal Regulation to Provide the Public

question 19

Essay

In response to the new federal regulation to provide the public with safe and wholesome seafood, an Alaska seafood processor is considering two new sanitation control systems to help monitor its seafood processing operations. System X has a useful life of 20 years and requires an installed cost of $33,000 and annual maintenance cost of $7000. Some of the equipment can be sold at $2200 at the end its useful life. System Y has a useful life of 10 years. The system will cost $16,500 to install and will involve an annual maintenance fee of $8500. At the end of year 10, system Y can be upgraded for $23,100 to have the same capability and will last another 10 years. However, the upgraded system will require an annual maintenance fee of $8700. The salvage value for the system Y is negligible. Which system should be selected based on the present worth method? Assume the company uses a MARR of 5% per year.

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Definitions:

Preliminary Controls

Initial measures or procedures put in place to monitor and regulate processes or operations.

Objectives

Specific, measurable goals that are designed to achieve the overall aim of an individual or organization.

After-Action Review

A systematic assessment of lessons learned and results accomplished in a completed project.

Structured Review

A formal, organized assessment process used to evaluate performance, systems, or processes, typically based on predetermined criteria.