Case 1 : Breakdown once in 2 years. Cost of repair = $22,000 Downtime Cost = $12
ID: 373338 • Letter: C
Question
Case 1 : Breakdown once in 2 years.
Cost of repair = $22,000
Downtime Cost = $120,000
Total cost (2 years) = $142,000
Yearly cost = $71,000
Over 20 years = $1,420,000
Cost per year of Breakdowns : $71,000
Case 2 : Service pump 12 times a year
Yearly Service cost = 12 *$1,200 = $14,400
Yearly Overhaul cost = $12,000/2 = $6,000
Total yearly cost = $20,400
Over 20 years = $408,000
Breakdown cost (once in 20 years) = $142,000
Total cost over 20 years = $408,000 + $142,000 = $550,000
Cost per year of PM: $22,500
Hence, second plan is much better.
Explanation / Answer
5. Answer the following questions relating to the following case study: A process pump in a chemical plant whose breakdown does not cause safety or Environmental exposures; breaks down every 2 years on average (or 50% probability Each year); Repair cost are $22,000 each time; downtime costs are $120,000 per incident. The Cost per year of Breakdowns Service the pump 12 times per year at a cost of $1,200 per service; Parts, labor, and downtime, plus a biennial scheduled overhaul, cost $12,000; new probability of failure with PM is 1 failure in 20 years 0.05). The Cost per year of PM:
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