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A waste-holding lagoon situated near the main plant of a chemical company receives sludge on a daily basis. When the lagoon is full, it is necessary to remove the sludge to a site located 4.95 kilome- ters from the main plant. Currently, when the la- goon is full, the sludge is removed by pumping it into a tank truck and hauling it away. This process requires the use of a portable pump that has an initial cost of $800 and an 8-year life. The com- pany can operate the pump at a cost of $25 per day, but the truck and driver cost $110 per day.

A waste-holding lagoon situated near the main plant of a chemical company receives sludge on a daily basis. When the lagoon is full, it is necessary to remove the sludge to a site located 4.95 kilome- ters from the main plant. Currently, when the la- goon is full, the sludge is removed by pumping it into a tank truck and hauling it away. This process requires the use of a portable pump that has an initial cost of $800 and an 8-year life. The com- pany can operate the pump at a cost of $25 per day, but the truck and driver cost $110 per day.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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8.18 A waste-holding lagoon situated near the main plant of a chemical company receives sludge on a daily basis. When the lagoon is full, it is necessary $3: Sa M. to remove the sludge to a site located 4.95 kilome- ters from the main plant. Currently, when the la- goon is full, the sludge is removed by pumping it into a tank truck and hauling it away. This process ava tity ex 8.21 A 1 Scie requires the use of a portable pump that has an initial cost of $800 and an 8-year life. The com- roa tiv pany can operate the pump at a cost of $25 per day, but the truck and driver cost $110 per day. ini an Alternatively, the company has a proposal to install a pump and pipeline to the remote site. The pump would have an initial cost of $600, a life of Al cos coa 10 years, and a cost of $3 per day to operate. (a) If the MARR is 15% per year and the pipeline will cos mi cost $3.52 per meter to construct, how many days (a) the per year must the lagoon require pumping to jus- tify construction of the pipeline? (b) The lagoon was pumped 40 times last year. Which alternative would have been cheaper? How do you know this is the correct answer? bre of cal 8.22 Thr
Transcribed Image Text:8.18 A waste-holding lagoon situated near the main plant of a chemical company receives sludge on a daily basis. When the lagoon is full, it is necessary $3: Sa M. to remove the sludge to a site located 4.95 kilome- ters from the main plant. Currently, when the la- goon is full, the sludge is removed by pumping it into a tank truck and hauling it away. This process ava tity ex 8.21 A 1 Scie requires the use of a portable pump that has an initial cost of $800 and an 8-year life. The com- roa tiv pany can operate the pump at a cost of $25 per day, but the truck and driver cost $110 per day. ini an Alternatively, the company has a proposal to install a pump and pipeline to the remote site. The pump would have an initial cost of $600, a life of Al cos coa 10 years, and a cost of $3 per day to operate. (a) If the MARR is 15% per year and the pipeline will cos mi cost $3.52 per meter to construct, how many days (a) the per year must the lagoon require pumping to jus- tify construction of the pipeline? (b) The lagoon was pumped 40 times last year. Which alternative would have been cheaper? How do you know this is the correct answer? bre of cal 8.22 Thr
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