Concept explainers
A part has two holes located for drilling by manual layout. If a drill jig is used. 0.5 min in processing time is saved for each piece. The labor rate is $9/hr. The overhead rate on the labor saved is 100%. Setup time is no more with than without the jig. The combined rate for interest, insurance, taxes, and maintenance is 35%. The cost of the jig is $500.
- How many pieces must be made in one lot to make the jig worthwhile?
- How many pieces must be made on the jig in one lot each month to earn the cost of the jig in 2 years?
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