NorSal Trondheim operates a salmon processing facility where fish are purchased from local sources along the North Sea, processed at the facility, and sold to customers for distribution. The plant manager, Inger Hansen, is contemplating a plant modermization to upgrade the technology in the plant. While the plant performs well enough now. modernizing equipment would allow the plant to increase capacity per hour, which is particularly advantageous because the factory has enough demand to cover the additional capacity. Currently, the plant operates seven days a week, three shifts of 20 workers per shift. The workers are paid $15 per hour. The firm is contemplating a plant modernization to upgrade existing equipment, which should increase the plant's output while lowering energy costs. Using the current equipment, around 1.500 pounds of salmon can be processed each hour, while the new plant would be able to processed each hour, while the new plant would be able to process 2.000 pounds per hour. The updated equipment is made by the same manufacturer as the existing equipment, and the new equipment quickly. For this reason, costs to train personnel are assumed to be negligible. The production manager, Bjorn Pedersen, is skeptical about undergoing the plant modernization. The older equipment, he argues, is already paid for, and new equipment would cost $15.000 per week. This cost is comprised of both principal and interest, and includes manufacturer installation of the equipment. The controller, Maret Karlsen, cautions that all decisions related to costs should be included in the analysis and that because the energy consumption would be different, this must also be accounted for in the decision. Energy costs are presently $12 per unit, and the existing plant uses 1.500 units of energy per week, With the modernized p ant the consumption of energy would fail by 50% 1 What is the productivity of the processing facility, with the equipment currently in use? 2 What would the productivity of the plant become if the new system were purchased 3 What wouldbethe amount of additional expense on equipment procasthtyofnetwosystems equa.?

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DAMENTALS%20OF%20PRODUCT
NorSal TRONDHEIM
NorSal Trondheim operatea a salmon processing facility where fish
are purchased from local sources along the North Sea, processed at
the facility, and sold to customers for distribution. The plant manager,
Inger Hansen, is contemplating a plant modermization to upgrade the
technology in the plant. While the plant performs well enough now,
modernizing equipment would allow the plant to increase capacity per
hour, which is particularly advantageous because the factory has
enough demand to cover the additional capacity. Currently, the plant
operates seven days a week, three shifts of 20 workers per shift The
workers are paid $15 per hour. The firm is contemplating a plant
modernization to upgrade existing equipment, which should
increase the plant's output while lowering energy costs. Using the
current equipment, around 1.500 pounds of salmon can be processed
each hour, while the new plant would be able to processed each hour,
while the new plant would be able to process 2.000 pounds per hour.
The updated equipment is made by the same manufacturer as the
existing equipment, and the new equipment quickly. For this reason,
costs to train personnel are assumed to be negligible. The production
manager, Bjorn Pedersen, is skeptical about undergoing the plant
modernization. The older equipment, he argues, is already paid for,
and new equipment would cost $15.000 per week. This cost is
comprised of both principal and interest, and includes manufacturer
installation of the equipment The controller Maret Karlsen, cautions
that all decisions related to costs should be included in the analysis
and that because the energy consumption would be different, this
must also be accounted for in the decision. Energy costs are presently
$12 per unit and the existing plant uses 1.500 units of energy per
week, With the modernizedpant, the consumption of energy would
fail by 50
1.What is the productivity of the processing facility. with the
equipment currently in
use?
2Whet would the productivty of the plant become if the new system
Were.purchased
and implemented"
3.What wouldberhe amountiof acd tionalerpense on equioment
Transcribed Image Text:DAMENTALS%20OF%20PRODUCT NorSal TRONDHEIM NorSal Trondheim operatea a salmon processing facility where fish are purchased from local sources along the North Sea, processed at the facility, and sold to customers for distribution. The plant manager, Inger Hansen, is contemplating a plant modermization to upgrade the technology in the plant. While the plant performs well enough now, modernizing equipment would allow the plant to increase capacity per hour, which is particularly advantageous because the factory has enough demand to cover the additional capacity. Currently, the plant operates seven days a week, three shifts of 20 workers per shift The workers are paid $15 per hour. The firm is contemplating a plant modernization to upgrade existing equipment, which should increase the plant's output while lowering energy costs. Using the current equipment, around 1.500 pounds of salmon can be processed each hour, while the new plant would be able to processed each hour, while the new plant would be able to process 2.000 pounds per hour. The updated equipment is made by the same manufacturer as the existing equipment, and the new equipment quickly. For this reason, costs to train personnel are assumed to be negligible. The production manager, Bjorn Pedersen, is skeptical about undergoing the plant modernization. The older equipment, he argues, is already paid for, and new equipment would cost $15.000 per week. This cost is comprised of both principal and interest, and includes manufacturer installation of the equipment The controller Maret Karlsen, cautions that all decisions related to costs should be included in the analysis and that because the energy consumption would be different, this must also be accounted for in the decision. Energy costs are presently $12 per unit and the existing plant uses 1.500 units of energy per week, With the modernizedpant, the consumption of energy would fail by 50 1.What is the productivity of the processing facility. with the equipment currently in use? 2Whet would the productivty of the plant become if the new system Were.purchased and implemented" 3.What wouldberhe amountiof acd tionalerpense on equioment
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