A Manufacturing Plant Is Planning to Replace Outdated Equipment with More

question 6

Essay

A manufacturing plant is planning to replace outdated equipment with more energy- efficient and environmental- friendly equipment. Two models are under
consideration. Model A is sold for $159,000 and can produce at an optimum speed of 78 unit/hour. Model B is sold for the same price, but can produce at an optimum speed of 76 unit/hour. Model A requires 6 hours of maintenance for every 4300 units produced, while Model B requires 5 hours of maintenance for every 3300 units. The maintenance cost for both models is $100 per hour. The variable operating cost is $340 per hour for Model A and $290 per hour for Model B. Due to obsolete parts, there is a sunk cost of $2700 for model A and $1900 for Model B . If the price of the product is $150 per unit and the company expects to sell 145,000 units each year, which model should be selected?

---

Definitions:

Information Rich Media

Refers to communication channels that can convey messages in a comprehensive manner through immediate feedback, personal focus, and the use of multiple cues.

Paraverbal Cues

The non-verbal elements of communication used to modify meaning and convey emotion, such as tone of voice, pacing, and volume.

Non-verbal Cues

Forms of communication without words, including gestures, facial expressions, and body language, which convey meaning or sentiment.

Personal Information

Data or details that pertain to an individual's private life, characteristics, or activities.