A 12-station transfer line was designed to operate with an ideal production rate = 50 parts/hour.\nHowever, the line does not achieve this rate, since
A 12-station transfer line was designed to operate with an ideal production rate = 50 parts/hour.
\r\nHowever, the line does not achieve this rate, since the line efficiency = 0.60. It costs $75/hour to
\r\noperate the line, exclusive of materials. The line operates 4000 hours per year. A computer
\r\nmonitoring system has been proposed that will cost $25,000 (installed) and will reduce downtime
\r\non the line by 25%. If the value added per unit produced = $4.00, will the computer system pay for
\r\nitself within one year of operation? Use expected increase in revenues resulting from the computer
\r\nsystem as the criterion. Ignore material costs in your calculations.