Solved problems on Material Selection - 2
Solved problems on Material Selection - 2
A company manufactures dining tables which mainly consist of a wooden frame and a table top. The different materials used to manufacture the tables and their costs are given in Table.
Description of item
|
Quantity
|
Cost
|
Wood
for frame and legs
|
0.1 m3
|
Rs.
12,000/m3
|
Wooden
table top with mica finish
|
1
|
Rs. 3,000
|
Leg
bushes
|
4
|
Rs.
10/ bush
|
Nails
|
100g
|
Rs.
300/kg
|
Total
Labour
|
15hr
|
Rs.
50/hr
|
In view of the growing awareness towards deforestation and environmental conservation, the company feels that the use of wood should be minimal. The wooden top therefore could be replaced with a granite top. This would require additional wood for the frame and legs to take the extra weight of the granite top. The materials and labor requirements along with cost details to manufacture a table with granite top are given in next Table.
Description of item
|
Quantity
|
Cost
|
Wood
for frame and legs
|
0.15
m3
|
Rs.
12,000/m3
|
Granite
table top
|
1.62m2
|
Rs.
800/m2
|
Leg
bushes
|
4
|
Rs.
25/ bush
|
Nails
|
50g
|
Rs.
300/kg
|
Total
Labour
|
8hr
|
Rs.
50/hr
|
If the cost of the dining table with a granite top works out to be lesser than that of the table with wooden top, the company is willing to manufacture dining tables with granite tops. Compute the cost of manufacture of the table under each of the alternatives described above and suggest the best alternative. Also, find the economic advantage of the best alternative.
Solution:
(a) Cost of table with wooden top
Cost of wood for frame and legs = Rs. 12,000 x 0.1 = Rs. 1,200
Cost of Wooden top = Rs. 3,000
Cost of Bushes = Rs. 40 x 4 = Rs. 40
Cost of Nails = Rs. 30 (100/1, 000) = Rs. 30
Cost of Labor = Rs. 50 x 15 = 750
Total cost of table with wooden top = Rs. 5,020
(b) Cost of table with granite top
Cost of wood for frame and legs = Rs. 12,000 x 0.15 = 1,800
Cost of granite top = Rs. 800 x 1.62 = Rs. 1,296
Cost of bushes = Rs. 25x4 = Rs. 100
Cost of Nails = Rs. 300 x (50/1,000) = Rs. 15
Cost of Labor = Rs. 50 x 8 = Rs. 400
Total Cost of table with granite top = Rs. 3,611
Decision
The cost of a table with granite top works out to be less than that of a table with a wooden top. Hence, the table with granite top should be selected by the manufacturer.
Economic advantage of table with granite top = Rs.5020 – Rs.3611 = Rs.1409
