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ES 312B Engineering Economy

Quiz 7: Selections of Present Economy (Case Study)

Directions: Present your solutions in clean sheets of long bond papers (or newsprints). Each
problem accounts for a maximum of 20 points. A perfect score will be credited for solutions that
are neat, correct, complete, and comprehensive. Solutions that are copied from others, or even
outside resources would entail deductions, or no credit points at all, depending on the level of
plagiarism. You may opt having your solutions hand-written or computerized. Submissions must
be in HARD COPIES, and DEADLINE is on Monday, December 5, 2022, 12:00 NN.

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.

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?

3) A manufacturer has been shipping his product (moderately heavy machines), mounted
only on skids without complete crating. To avoid crafting 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 crafted so that 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 crafting
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.)

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.
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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.

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.