4.2. Defender and Challenger Comparison

Try these first

1. 1.

   Calculate the downtime cost if the equipment cost is 600 rupees per hour, and the downtime percentage is 4%.

   Hint

   Use the formula: Downtime Cost = (Equipment Cost * Downtime Percentage) / 100.

2. 2.

   What is the cumulative downtime cost for a machine with a downtime cost of 20 rupees per hour operating for 2000 hours?

   Hint

   Multiply the hourly downtime cost by total operational hours in a year.

3. 3.

   What is the formula for calculating downtime cost?

   • Equipment Cost * Downtime Percentage
   • Equipment Cost * Downtime Percentage / 100
   • Downtime Percentage / Equipment Cost

   Hint

   Think about how we represent percentages.

4. 4.

   True or False: Economic life is the duration when maintenance costs are at their peak.

   • True
   • False

   Hint

   Consider the concept of cost minimization.

5. 5.

   A construction firm has two machines: Defender costing 900 rupees per hour, with cumulative costs rising significantly each year. The Challenger has an initial cost of 1,100 rupees but is predicted to reduce operational costs by 25% within the first year. Calculate when the Challenger would become cost-effective assuming 2000 hours of usage annually.

   Hint

   Consider the cumulative costs across multiple years.

6. 6.

   A factory uses a machine with a downtime rate of 10%. If the hourly cost is 1,000 rupees, calculate the potential savings over a year if a new machine with only 3% downtime is bought instead. Calculate costs over 2500 operational hours.

   Hint

   Focus on how downtime impacts total yearly costs.