Tuesday 23 December 2014

Assignment 6

Problem 9.1:

Examine the detail drawing for a product designed by your team. Be sure you identify the actual shape, dimensions, and tolerances. What other information contained in the drawing?










Tuesday 16 December 2014

problem 17.1


SOLUTION:


Adjustment for the cost of the different size or capacity of the cyclone dust collector need to be purchased can not be calculated directly. Note that while the new units has 10 times the capacity as the unit purchased in 1985 will cost 10X more, because of economy of scale. However, the purchase cost will have increased because of inflation in the 27 years since it was purchased in 1985. Assuming cost inflation or 5 % per year, the original cost of $35,000 is now equivalent to


new cost for the 100 ft^3/min = [$35,000 x 5%] + $35,000 = $36,750
if 100 ft^3/min = X
1000 ft^3/min = 10X


Thus, the estimate of the cost to purchase 1000 ft^3/min in 2012 = 10X = $367,500


problem 17.2:

Many consumers item today are designed in the United State and manufactured over-seas where labor cost is much lower. A middle range athletic shoe from a name brand manufacturer sells for $70 in the U.S. The shoe company buys the shoe from an off-shore supplier for $20 and sells to the retailer for $36. The profit margin for each unit in the chain is: supplier-9%, shoe company-17%, retailer-13%. Estimate major categories of cost breakdown for each unit of chain. Do this as a team problem and compare the results for the entire class.


SOLUTION:

Estimation of the major categories of cost breakdown for each unit in the chain :

Shoe Company
Production labor                               $2.75
Materials                                            $9.00
Rent, equipment                                $3.00
Supplier’s operating profit              $1.75
Duties                                                 $3.00
Shipping                                             $0.50
Total cost                                          $20.00


Retailer
Research and development             $20.50
Promotion and advertising              $4.00
Sales, distribution, admin                 $5.00
Company’s operating profit             $6.50
Total cost                                          $36.00

Consumer
Retailer’s rent                                    $20.00
Personnel                                           $15.00
Others                                                 $15.00
Retailer’s operating profit               $20.00
Total cost                                          $70.00



problem 17.4:


SOLUTION:




A manufacturer of a small hydraulic turbine has the annual cost data given. Calculate the manufacturing cost and the selling price for the turbine.

Raw material and components costs               $2,150,000
Direct labor                                                     $950,000
Direct expenses                                               $60,000
Plant manager and staff                                    $180,000
Utilities for plant                                               $70,000
Taxes and insurance                                         $50,000
Plant and equipment depreciation                    $120,000
Warehouse Expenses                                       $60,000
Office Utilities                                                  $10,000
Engineering expenses (plant)                             $90,000
Engineering staff and salaries (plant)                  $30,000
Administrative staff salaries                              $120,000
Sales staff, salaries and commissions                $100,000
Total Annual Sales                                           60 units
Profit Margin                                                   15%

Variable costs
Raw material and components costs               $2,150,000
Direct labor                                                    $950,000
Direct expenses                                              $60,000
Engineering expenses (plant)                            $90,000
Engineering staff and salaries (plant)                 $30,000
Total Variable Costs                                       $3,280,000

Factory Expenses
Utilities for plant                                             $70,000
Taxes and insurance                                        $50,000
Plant and equipment depreciation                    $120,000
Warehouse Expenses                                      $60,000
Total Factory Expenses                                  $300,000

General and Administrative Expenses (G & A)
Plant manager and staff                                  $180,000
Office Utilities                                                $10,000
Administrative staff salaries                             $120,000
Total G & A                                                   $310,000

Manufacturing Cost = Variable costs + Factory Expenses + General and Administrative Expenses
                                  = $3,280,000 + $300,000 + $310,000
                                  = $3,890,000


Sales, staff, salaries and commissions      $100,000
Total Cost = Manufacturing costs + Sales, staff, salaries and commissions
                  = $3,990,000


Profit Margin = Profit / Sales = 15%
Profit (P) = Selling Price (S) – Total Cost (CT)
S = P + CT
S = 0.15S + CT
S – 0.15S = CT
0.85S = CT
S = CT / 0.85
S = $3,990,000 / 0.85
S = $4,694,117.65

Total Annual Sales = 60 units
Selling Price for One Turbine = S / 60
                                                 = $4,694,117.65 / 60
Selling Price                           = $78,235.29 per unit 




problem 17.10:

A company has received an order for four sophisticated space widgets. The buyer will take delivery of one unit at the end of the first year and one unit at the end of each of the succeeding three years. He will pay for a unit immediately upon receipt and not before. However, the manufacturer can make the units ahead of time and store them at negligible cost for future delivery.
The chief component of cost of the space widget is labor at $25 per h. All units made in the same year can take advantage of an 80% learning curve. The first unit requires 100,000 h of labor. Learning occurs only in one year and is not carried over from year to year. If money is worth 16% after a 52% tax rate, decide whether it would be more economical to build four units the first year and store them, or build one unit in each of the four years.


SOLUTION:

For an 80% learning curve, n = -0.322. The first unit requires y1 = 100,000 h to build.

The cost of making four units in one year is:

(100,000 + 80,000 +70,175 +63,979) x $25/h = $7,853,850



No Advantage from Learning Curve: If we do not take advantage of the learning curve we would make one space widget each year for a total cost over four years of

(100,000) x $25 x 4 = $10,000,000. This neglects the cost of living escalation that would occur each year, but it will be assumed that this would equal the cost of maintaining widgets in storage for up to four years.


In terms of engineering economy, the problem becomes which of the two alternatives results in the lowest present value. The present value (P) after taxes, assuming that labor costs are paid at the end of the year (an unrealistic but conventional assumption in engineering economy), for the use of the learning curve situation is given as:



If the four units are made in four successive years,



= 0.48(2,155,172 + 1,857,907 + 1,601,644 + 1,380,728) =0.48(6,995,451)

= $3,357,816


Taking advantage of the learning curve saves over $100,000 in cost compared with making one widget each year and deferring the costs into the future. Making the widgets in a batch also frees up the work force to take on other profitable work

Sunday 14 December 2014

ASSIGNMENT 8

Failure Mode and Effects Analysis (FMEA)

                Failure mode and effects analysis (FMEA) is a team – based methodology for identifying potential problems with the new or existing designs. It is the first step of a system reliability study. FMEA is the core task in reliability engineering, safety engineering, and quality engineering. FMEA involves reviewing as many components, assemblies, and subsystem as possible to identify failure modes, and their causes and effects. In order to determine the components of the process that are most in need of change, FMEA includes the following steps:


1.      Steps in the process.
2.      Failure modes (What could go wrong?)
3.      Failure causes (Why would the failure happen?)
4.      Failure effects (What would be the consequences of each failure?)


            Three factors that are considered in developing a FMEA:


1.      The severity of the failure.
2.      The probability of occurrence of failure.
3.      The likelihood of detecting the failure in either design or manufacturing, before the product is used by the customer.


            Different types of FMEA analysis:
1.      Functional,
2.      Design, and
3.      Process FMEA.


            Major benefits derived from a properly implemented FMEA are as follows:
1.      It provides documentation in selecting design with high probability of successful operation and safety.
2.      A uniform documentation method of assessing potential failure mechanism, failure modes and their impact on system operation, resulting in a list of failure modes ranked according to seriousness of their system impact and likelihood of occurrence.
3.      Early identification of single failure points (SFPS) and system interface problems which may be critical to mission success and/or safety.
4.      An effective method for evaluating the effect of proposed changes t the design and/or operational procedures on mission success and safety.
5.      A basis for in – flight troubleshooting procedures and for locating performance monitoring and fault – detection devices.
6.      Criteria for early planning of tests.



Example of FMEA analysis for car tire:


Keywords:
SEV – severity
OCC – occurrence
DET – Detection

RPN – Risk Priority Number



Criteria for FMEA Analysis

            FMEA is analyzed based on three criteria:
1.      Severity effect on customer.
2.      Occurrence of failure.
3.      Easy to detect.
            It is then ranked from 1 (low) to 10 (high) for each criterion.


Table 1: Severity, Occurrence and Detection Ratings


Formula for RPN is:

RPN = severity x occurrence x detection