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Selection of Materials: Present Economy

The document discusses several factors to consider when selecting between multiple options for manufacturing processes or designs. These include selection of materials, methods, designs, sites, and number of workers. A sample problem is provided for each section to demonstrate how to determine the most economical option by analyzing costs.

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mayka mawrin
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9K views9 pages

Selection of Materials: Present Economy

The document discusses several factors to consider when selecting between multiple options for manufacturing processes or designs. These include selection of materials, methods, designs, sites, and number of workers. A sample problem is provided for each section to demonstrate how to determine the most economical option by analyzing costs.

Uploaded by

mayka mawrin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Present Economy

Selection of materials
In manufacturing a product it usually happens that two or more materials
are available and such materials will be equally satisfactory. The problem
therefore reduces to which among the materials will result in the most
economical product and the same time give the best results. In these studies
the costs of the materials and their processing are take into account.
SAMPLE PROBLEM
A machine part to be machined may be made either form an alloy of
aluminum or steel. There is an order for 8,000 units. Steel costs P3.80 per
kg., while aluminum costs P8.70 per kg. If steel is used, the steel per unit
weighs 110 grams; for aluminum, 30 grams. When steel is used, 50 units
can be produced per hour; for aluminum, 80 units per hour with the aid of a
tool costing P640, which will be useless after the 8,000 units are finished.
The cost of the machine and operator is P10.80 per hour. If all other costs
are identical, determine which material will be more economical.
SOLUTION:
Selection of method
In digging ditches or irrigation canals, manual labor or a ditch digging
machine may be used and both methods will give satisfactory results. In
mechanical operations a product may be made by two or more methods
giving equivalent results. Some goods may be delivered by various methods
such as by using different capacity trucks, and the results would still be the
same regardless of the truck used. These are but few of the examples that
may be cited to show that certain operations are capable of being
accomplished by two or more methods. The present economy study reduces
to determining the most economical among the different methods.
SAMPLE PROBLEM
The ore of a gold mine in the Mountain province contains, on the average,
0.5 gram of gold per ton. One method of processing costs P1, 650 per ton
and recovers 93% of the gold, while another method costs only P1,500 per
ton and recovers 81% of the gold. If gold can be solid at P8, 500 per gram,
which method is better and by how much?
SOLUTION
Selection of design
In the design of a machine to produce a certain product, the engineer
responsible for the work will usually make as many designs as possible and
from which, by a process of elimination, he will select the design best suited
for the work to be done with particular care being given to the one which will
do the work with the utmost economy. In the design of packages for goods
sold in the market, the manufacturer will always select that one which he
believes had the best appeal to buying public.
SAMPLE PROBLEM
A company manufactures 1,000,000 units of a product yearly. A new design
of the product will reduce materials cost by 12%, but will increase
processing cost by 2%. If material cost is P1.20 per unit and processing will
cost P0.40 per unit, how much can the company afford to pay for the
preparation of the new design and making changes in equipment?
SOLUTION:

Selection of site location


In the choice of a factory site many factors are to be considered, among
which are the cost of the land, the construction cost at the different possible
sites, the availability of skilled labor, and many other factors. In highway or
dam construction, the location of the borrow pit will affect the cost of the
earth to be transported. In these cases, care must be taken in the economic
study to include all pertinent factors that will affect the work.
SAMPLE PROBLEM
Complying with all government housing regulations and requirements, the
employees’ union pf a certain firm has the option to purchase either of two
sites, each having an area of 18 hectares (180,000 sq. m.) of undeveloped
land. The first singly owned, would cost P20.00 a sq. m., but would need a
roadway system, including the access road, 4,000 meters long, at a cost of
P110.00 pet meter. Additional development expenses would be P60, 000 to
subdivide and grade into 320 house lots, and another P32,000 for a hollow
block fence and security gates.
The second site consists of three lots, separately owned, with a total area of
18 hectares: 7 hectares at P25.00 a sq. m. ; 5 hectares at P21.00 a sq. m.;
and 6 hectares at P14.00 a sq. m. The road system for this site would be
only 3,200 meters long at P100.00 per meter, but needs two box culverts
each costing P25,000. Lot grading would be P35, 000; fencing and security
gates P24, 000.
Assuming that all other facilities would cost the same in both sites, which of
the two sites would you recommend based on cost of site development
alone?
SOLUTION:
Comparison pf proficiency among workers
In industrial operations where the efficiency of workers is a factor affecting
costs, it is usually observed that workers have varying efficiencies. Where
the proficiency of workers can be translated into monetary values, efficient
and diligent workers are paid higher wages.
SAMPLE PROBLEM
Two workers, A and B, produce the same product on identical machines. A
receives P25.00 per hour and he produces 100 units per hour. B is able to
produce 120 units per hour. The machine rate or cost of operation of the
machines used by them is P100.00 per hour.

a. Determine the cost per piece for worker A.


b. Determine the hourly wage of worker B in order that his cost per piece will
equal of A.
SOLUTION:
Economy of tool and equipment maintenance
In many activities, tools have to be sharpened from time to time, and
equipment have to be kept in optimum operating condition all the time. In
certain cases, experience will indicate the best time to perform certain
operations to maintain equipment at the highest level of efficiency.

SAMPLE PROBLEM
A machine used for cutting materials in a factory has the following outputs
per hour at various speeds and requires periodic tool regrinding at the
intervals cited:
              SPEED           OUTPUT PER HOUR            TOOL REGRINDING
 A                 200 pieces                        every 8 hours
 B                 250 pieces                        every 7 hours
 C                 280 pieces                        every 5 hours
A set of tools costs P1,800 and can be grounded twenty times. Each
regrinding costs P18.00 and the time needed to regrind and change tools is
1 hour.  The machine operator is paid P28.00 per hour, including the time
the tool is changed. The tool grinder who also sets the tools to the machine
is paid P25.00 per hour.  The hourly rate chargeable against the machine is
P54.00, regardless of machine speed. Which is the most economical?
SOLUTION:
Economy of number of workers
In many industrial operations it is observed that a certain number of workers
cooperating on a specific phase of the work will lead to the highest
productivity. An increase beyond this number will often cause the taking into
effect of the Law of Diminishing Returns. An excess of workers will result in
some being idle at certain periods while waiting for the work of others to be
completed. In such case, economy dictates that only a sufficient number of
workers be assigned to minimize idleness.
SAMPLE PROBLEM
A man decided to paint his house himself after office hours. He can paint 25
sq. m. per hour on the average. It takes him 15 minutes to prepare his
materials and 20 minutes to keep the materials after painting. If there are
900 sq. m. to be painted, how many hours will it take him to paint his house
if he devotes 2 ½   hours each day?
SOLUTION:

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