Engineering Economy, Student Value Edition (17th Edition)
17th Edition
ISBN: 9780134838137
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 14, Problem 11P
To determine
Selecting the alternate.
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Problem 2: As a building designer, you have been asked to analyze and select the best
window frame type alternative-either aluminum or steel. The project is located in a remote
area, and the nearest industrial area hosting steel and aluminum windows frames
manufacturers is 250 km away. All project windows are identical, and the circumference of
the window frame is 6.2 meter. A crew of two labors is required to manufacture one steel
frame. It takes 2.5 hours to manufacture the first window every day, and the learning rate is
0.9. The number of production units is per day is limited to 8. The weight of steel is 12 kg per
meter, and the weight of aluminum is 4.5 kg per meter. The cost of steel is 0.4 OMR per kg
and the cost of aluminum 1.1 OMR per kg. If 45 windows frames are required for the project,
the crew cost is 3 OMR per hour for steel frames and 3.6 for aluminum frames, and the
transportation, price is 0.01 OMR per kg per 50 km, which alternative would you select?
The city engineer and economic development directors are evaluating two sites for construction of a multipurpose sports arena. The
sites are downtown (DT) and southwest (SW) of the metropolitan area. The city already owns enough land at the DT site; however, the
land for a parking garage will cost $1 million, and construction costs will be $16 million for the parking garage, infrastructure relocation,
and drainage. The SW site is 30 km from downtown, but the land will be donated by a developer who knows that an arena at this site
will dramatically increase the value of the remainder of his land holdings. Because of its centralized location, there will be greater
attendance at most of the events held at the DT site. This will result in more revenue to vendors and local merchants in the amount of
$700,000 per year. Additionally, the average attendee will not have to travel as far, resulting in annual benefits of $400,000 per year.
All other costs and revenues are expected to be the same…
Suppose a researcher is analyzing the economic efficiency of two different production techniques, A and B, in a manufacturing industry. Technique A has a fixed cost of $10,000 and variable costs of $5 per unit, while technique B has a fixed cost of $15,000 and variable costs of $3 per unit. The market price per unit of the product is $20. Calculate the breakeven point in terms of units for each technique, and determine which technique is more efficient in terms of lower breakeven sales.
Chapter 14 Solutions
Engineering Economy, Student Value Edition (17th Edition)
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