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Assignment IV

The document presents various case studies related to resource management techniques in a business context, focusing on the cost analysis of machinery and equipment replacement. It includes calculations of maintenance costs, operating costs, resale values, and optimal replacement strategies for machines and light bulbs. The scenarios provided require decision-making based on financial metrics such as purchase price, running costs, salvage values, and failure rates.

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22 views1 page

Assignment IV

The document presents various case studies related to resource management techniques in a business context, focusing on the cost analysis of machinery and equipment replacement. It includes calculations of maintenance costs, operating costs, resale values, and optimal replacement strategies for machines and light bulbs. The scenarios provided require decision-making based on financial metrics such as purchase price, running costs, salvage values, and failure rates.

Uploaded by

71762331045
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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COIMBATORE INSTITUTE OF TECHNOLOGY

II YEAR M.Sc. SOFTWARE SYSTEMS


20MSS41 – RESOURCE MANAGEMENT TECHNIQUES
ASSIGNMENT III
07.04.2025
1. A firm is considering replacement of a machine, whose cost price is Rs. 12,200 and the scrap value is only
Rs.200. The maintenance costs (in rupees) are found from experience to be as follows.
Year 1 2 3 4 5 6 7 8

Maintenance 200 500 800 1200 1800 2500 3200 4000


Cost
2. The data on the operating costs per year and resale prices of equipment A whose purchase price is Rs. 10000
are given below
Year 1 2 3 4 5 6 7

Operating cost Rs 1500 1900 2300 2900 3600 4500 5500

Resale value Rs. 5000 2500 1250 600 400 400 400

3. A manufacturer is offered two machines A and B. A is priced at Rs. 10000 and running costs are Rs.1600 for
each of the first five years, increasing by Rs.400 per year in the sixth and subsequent years. Machines B which
has the same capacity as A, costs Rs.5000 but will have running costs of Rs.2400 per year for six years
increasing by Rs. 400 per year, thereafter. If the capital is worth 10% per year which machine should be
purchased?
4. A lorry owner estimates that the running costs and salvage values of truck are given below.
Year 1 2 3 4 5 6 7 8

Run cost 6000 7500 9000 12000 15000 20000 20000 30000

Slag 60000 40000 30000 25000 20000 2000 2000 2000

If the purchase price Rs.80,000 estimate the optimum replacement age, assuming that the rate of return on
capital investment is 15% per year.
5. There is a large number of light bulbs, all of which must be kept in working order. If a bulb fails in service, it
costs Rs.1 to replace it, but if all the bulbs are replaced in the same operation, it costs only 35 paise a bulb. If
the proportion of bulbs failing in successive time interval is known, decide on the best replacement policy and
give reason. The following mortality rates for light bulbs have been observed.
Proportion failing during first week = 0.09
Proportion failing during second week = 0.16
Proportion failing during third week = 0.24
Proportion failing during fourth week = 0.36
Proportion failing during fifth week = 0.12
Proportion failing during sixth week = 0.03.

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