Name: Von Andrae A.

Panes Subject: ES 312B Engineering Economy

Course/Year: BSEE-3

Quiz 6: Selections on Present Economy

1) A municipal solid-waste site for a city must be located at Site A or Site B. After sorting, some of
the solid refuse will be transported to an electric power plant where it will be used as fuel. Data for
the hauling of refuse from each site to the power plant are shown in the Table.

If the powerplant will pay $8.00 per cubic yard of sorted solid waste delivered to the plant, where
should the solid-waste site be located? Use the city’s viewpoint and assume that 200,000 cubic yards
of refuse will be hauled to the plant for one year only. One site must be selected.

Solution:

At Site A:

Average Hauling Distance: 4 miles

Rental Fee: $5,000.00

Hauling Cost: $1.50 per cubic yard - mile

Total Cost:

Rental Fee + Hauling Cost

$ 1.50
$ 5,000.00+( × $ 200,000 cubic yard × 4 miles)=$ 1,205,000
cubic yard −mile

At Site B:

Average Hauling Distance: 3 miles

Rental Fee: $100,000.00

Hauling Cost: $1.50 per cubic yard - mile

Total Cost:

Rental Fee + Hauling Cost

$ 1.50
$ 100,000.00+( × $ 200,000 cubic yard ×3 miles)=$ 1,000,000
cubic yard −mile

The total cost in Site A is $1,205,000, while in Site B is $1,000,000. The solid-waste site that should
be selected is Site B as its rental and hauling costs is lower than Site A by $205,000.

2. In the design of an automobile radiator, an engineer has a choice of using either a brass-copper
alloy casting or a plastic molding. Either material provides the same service. However, the brass-
copper alloy casting weighs 25 pounds, compared with 20 pounds for the plastic molding. Every
pound of extra weight in the automobile has been assigned a penalty of $6 to account for increased
fuel consumption during the life cycle of the car. The brass-copper alloy casting costs $3.35 per
pound, whereas the plastic molding costs $7.40 per pound. Machining costs per casting are $6.00 for
the brass-copper alloy. Which material should the engineer select, and what is the difference in unit
costs?

Solution:

Brass-Copper Ally Casting:

Weight: 25 pounds

Cost per pound: $3.35

Casting material cost:

25 ×3.35=$ 83.75

Penalty of every pound of extra weight:

25 −20=5 pounds

5 × $ 6.00=$ 30.00

Machining cost per casting: $6.00

Total Cost:
$ 83.75+ $ 30.00+ $ 6.00=$ 119.75

Plastic Molding:

Weight: 20 pounds

Cost per pound: $7.40

Casting material cost:

20 ×7.40=$ 148.00

Penalty of of every pound of extra weight: No every pounds wasted

Total Cost:
$ 148.00

Difference unit cost between the two materials:

$ 148.00 − $ 119.75=$ 28.25

The material the engineer should use is Brass-Copper Alloy Casting because it is cheaper than
using the Plastic Molding by $ 28.25.

3. A manufacturer has been shipping his product (moderately heavy machines), mounted only on
skids without complete crating. To avoid crating he must ship in freight cars which contain only his
machines. To do this he must pay freight on a car capacity load of 42 tons regardless of whether or
not the car is completely full. In the past he actually has shipped only 30 tons in each car. The car
load freight rate is P4.10 per hundred pounds. If the machines are crated so that they can be shipped
in mixed car lots, along with other merchandise, they can be shipped at a rate of P4.20 per hundred
pounds with the freight bill computed only on the actual weight shipped. The cost of crating would
be P25.00 per machine and would increase the shipping weight from 1,200 to 1,220 pounds per
machine. Which procedure should be followed? (1 ton = 2,200 lbs.)

Solution:

With Crating:

Machines to be shipped:
lbs
30 tons× 2,220
ton machines
=55
1200 lbs

Shipping weight increase:

lbs lbs lbs

1220 −1200 =20
macℎine macℎine macℎine

lbs
55 macℎines ×20 = 1100 lbs
macℎine

Cost of Shipment:

₱ 4.20
׿) + 1100 lbs] = ₱ 2818.20
100lbs

Cost of Crating:

₱ 25.00
×55 macℎines =₱ 1375.00
macℎine

Total shipping cost:

₱ 2818.20 + ₱ 1375.00 = ₱ 4193.20

Without Crating:

Cost of Shipment:

₱ 4.10
׿) = ₱ 3788.40
100lbs

Money saved by shipping without crate:

₱ 4193.20 - ₱ 3,788.40 = ₱ 404.80

The manufacturer could save ₱ 404.80 if the products will be shipped without crate.

4. An industrial engineer has designed two alternative methods for accomplishing a production job.
Both methods involve the acquisition of the same working place and other capital equipment to be
used for this job only.
Method A calls for a crew consisting of three men each costing P30.00 per hour. This method will
result in the production of 10 units per hour of which two will be rejects.
Method B calls for a crew of two men each costing P35.00 per hour and should result in the
production of eight units per hour of which one will be reject.
The cost of the direct material lost in each reject is P20.00. If a certain total number of units is to be
produced, find which method is not economical.

Solution:

Cost of rejects in

Method A:
2 ×20=₱ 40
Method B:
1 ×20=₱ 20

Man Labor in

Method A:
3 ×30=₱ 90
Method B:
2 ×35=₱ 70

Total cost in

Method A:

Cost of rejects+Man Labor

₱ 40+ ₱ 90=P 130

10 −2=¿8 --- unit produced

₱ 130
=₱ 16.25
8

Method B:

Cost of rejects+Man Labor

P 20+70=P 90

8 −1=¿7 --- unit produced

₱ 90
=₱ 12.86
7

Method A is not economical because it costs higher than Method B by ₱ 3.39.

5. The speed of your automobile has a huge effect on fuel consumption. Travelling at 65 miles per
hour (mph) instead of 55 mph can consume almost 20% more fuel. As a general rule, for every mile
per hour over 55, you loose 2% in fuel economy. For example, if your automobile gets 30 miles per
gallon at 55 mph, the fuel consumption is 21 miles per gallon at 70 mph.
If you take a 400-mile trip and your average speed is 80 mph rather than the posted speed limit of
70 mph, what is the extra cost of fuel if gasoline costs $4.00 per gallon? Your car gets 30 miles per
gallon (mpg) at 60 mph.

Solution:

At Posted Speed Limit (70 mph):

Distance to travel: 400 miles

Cost per gallon: $4.00

Fuel consumption rate:

miles miles miles

30 − 30(70 −60)(0.02) =24
gallon gallon gallon

Total Cost:

$ 4.00 400 miles

×
gallon miles ¿ $ 66.67
24
gallon

At Average Speed (80mph):

Distance to travel: 400 miles

Fuel consumption rate:

miles miles miles

30 − 30(80 − 60)(0.02) =18
gallon gallon gallon

Total Cost:

$ 4.00 400 miles

× =$ 88.89
gallon miles
18
gallon

Extra Cost of Fuel:

Average Speed (80mph) - Posted Speed Limit (70 mph)

$ 88.89 − $ 66.67=$ 22.22

If gasoline costs $4.00 per gallon, the extra cost of fuel at the average speed which is 80
miles per hour is $22.22.