Engineering Economy
Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Chapter 11, Problem 9P
To determine

Calculate the investment.

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A small automotive supply company manufactures fuel gauges for various types of cars. The company has fixed costs of $1,885,000 per year. The average cost of manufacturing a fuel gauge is $21.88. The average price the fuel gauge sells for is $48.20 The company manufactures its products 252 days per year. What is the minimum number of fuel guages per day that the company must produce in order to break even?
For a motor to operate a pump, a design engineer must choose the horsepower. Horsepower rating is a design characteristic that can vary from 10 to 40 horsepower. The motor will cost $120 per year to operate, plus $0.60 per horsepower. The running expenses of such motors will be $0.055 per horsepower-hour divided by the horsepower rating. Each year, 9,000 horsepower-hours will be required.   Determine how much horsepower should be supplied to keep the overall yearly cost to a minimal. Demonstrate that your entire cost each year has been reduced.
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