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Manuel S. Enverga University Foundation, Lucena City An Autonomous University

Engineering Economy

ECON

SYNCHRONOUS LECTURE College of Engineering

Manuel S. Enverga University Foundation, Lucena City An Autonomous University PRESENT ECONOMY

Manuel S. Enverga University Foundation, Lucena City An Autonomous University

Present Economy

Present economy studies occur in the following situations: (1) selection of materials (2) selection of method to be used (3) selection of design (4) selection of site location for a project,. (5) comparison of proficiency among workers, (6) Economy of tool and equipment maintenance, and (7) Economy of number of workers. Mathematics in the Modern World

Manuel S. Enverga University Foundation, Lucena City An Autonomous University

Example

A machine part to be machined may be made either from an alloy of aluminum or steel. There is an order for 8 , 000 units. Steel costs P 3. 80 per kg, while aluminum costs P 8. 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 P 640. 00 , which will be useless after the 8 , 000 units are finished. The cost of the machine and operator is P 10. 80 per hour. If all other costs are identical, determine which material will be more economical. Mathematics in the Modern World

Manuel S. Enverga University Foundation, Lucena City An Autonomous University

Example

A manufacturer has a contract to produce 5000 units of a certain device. The device can be made by highly-trained workmen working individually. The device can also be made by less-skilled workmen working together if they are given specialized equipment and proper supervision. The highly-trained workmen are paid P 20. 00 per hour, and each can produce one unit every 2 hours, on the average. The specialized equipment can be placed in operation at an original cost of P 60 000. 00 and it will be worthless at the time all the 5000 units are manufactured. With this equipment four men, paid P 15. 00 each per hour, and a foreman, paid $ 25. 00 per hour, can do the work. All the five men working together can finish one unit in 15 minutes. Determine the gain or loss if the specialized equipment is used. Mathematics in the Modern World

Manuel S. Enverga University Foundation, Lucena City An Autonomous University

Example

A manufacturer has a contract to produce 5000 units of a certain device. The device can be made by highly- trained workmen working individually. The device can also be made by less-skilled workmen working together if they are given specialized equipment and proper supervision. The highly-trained workmen are paid P 20. 00 per hour, and each can produce one unit every 2 hours, on the average. The specialized equipment can be placed in operation at an original cost of P 60 000. 00 and it will be worthless at the time all the 5000 units are manufactured. With this equipment four men, paid P 15. 00 each per hour, and a foreman, paid $ 25. 00 per hour, can do the work. All the five men working together can finish one unit in 15 minutes. Determine the gain or loss if the specialized equipment is used. Mathematics in the Modern World Mathematical Patterns and Reasoning Highly skilled^ Workmen^ Less (^) skilled Workmen Time to (^) manufacture : (^) 5000(2) =^10 ,000hrs Time^ to^ manufacture^ :^5000 (t) =^ 1250hrs Labor 10 , 000 (20)^ :^200 ,^000 Labor^ :^1250 [(4)(15)^ +^ 25% :^106250 Equipment " = (^60) , 000 166250 USING SPECIALIZED EQUIPMENT^ WILL^ RESULT ANSWER (^) : in A (^) GAIn OF (^33) , 750

Manuel S. Enverga University Foundation, Lucena City An Autonomous University

Example

Mathematics in the Modern World JIG A JIG B Estimated Life 100,000 pcs 100,000 pcs First Cost P5,000.00 P4,200. Hourly Wage of Operator P30.00 P25. No. of Pieces Produced per Hour 100 80

# of his to^ finish work^ =^100

, 000

• (^1) , 000hrs of (^) his to (^) finish work = 10 , 000-125 (^) as total (^) wage of (^) operator =^1000 (30)^ =^30 ,^000 total (^) wage of (^) operator =^ 1250(25) =^ 31250 cust of^ jig A JIG A = (^5) , 000 I cust of^ jig (^) B JIG B = 4208 Total cost for^ JigA 35 , 000 Total cost for^ JigB 35. 450 ANSWER (^) : 616 A (^) IS (^) CHEAPER BY 150 pesos And SHOuld BE UseD

Manuel S. Enverga University Foundation, Lucena City An Autonomous University

Example

A certain masonry dam requires 200 , 000 cu.m. of gravel for its construction. The contractor found two possible sources for the gravel with the following data: Which of the two sites will give the lower cost? Mathematics in the Modern World Source A Source B Average distance, gravel pit to dam site 3.0 km 1.2 km Gravel cost/cu.m. at pit ________ P10. Purchase price of pit P800,000.00 ________ Road construction necessary P450,000.00 None Overburden to be removed at P4.20/cu.m. _______ 90,000 cu.m. Hauling Cost per cu.m. per km. P4.00 P4.

Manuel S. Enverga University Foundation, Lucena City An Autonomous University

Example

Two workers, A and B, produce the same product on identical machines. A receives P 25. 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 P 100. 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 that of A. Mathematics in the Modern World

Manuel S. Enverga University Foundation, Lucena City An Autonomous University

Example

Two workers, A and B, produce the same product on identical machines. A receives P 25. 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 P 100. 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 that of A. Mathematics in the Modern World a. Cost^ per piece^ for worker^ A^ : 25 + 100 = 1. (^25) cost per unit b.^ Let^ W^ = hourly wage of^ worker^ B W (^) + 100 = 1 - 25 120 W + 100 =^150 W =^150 - 100 w =^50

Manuel S. Enverga University Foundation, Lucena City An Autonomous University

Example

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 long will it take him to paint his house if he devotes 2 ½ hours each day? Mathematics in the Modern World number (^) of hours required : (^1900) = (^56) hours net time (^) (actual (^) painting) : 2. 5-15+ 20 = 1. 92 housa number (^) of (^) days : 36 = 18. 019 dayas

Manuel S. Enverga University Foundation, Lucena City An Autonomous University End of Chapter 1