1. Downtime Cost Calculation

Try these first

1. 1.

   What is the downtime cost per hour if the equipment costs 900 rupees?

   Hint

   Calculate 3% of 900.

2. 2.

   How much is the yearly downtime cost if the machine operates for 2000 hours?

   Hint

   Multiply the hourly cost by the annual hours operated.

3. 3.

   What percentage of downtime costs is applied to the hourly equipment cost?

   • 3%
   • 5%
   • 10%

   Hint

   Reflect on how the downtime percentage is stated in the section.

4. 4.

   Is the downtime cost in the second year always higher than the first?

   • True
   • False

   Hint

   Think about how the downtime percentage is increasing in successive calculations.

5. 5.

   If your equipment has an obsolescence factor that increases yearly and costs 900 rupees per hour with increased maintenance fees leading to a total cumulative cost of 300,000 rupees over three years, how would you analyze the need for equipment replacement?

   Hint

   Consider long-term patterns in cost versus productivity and how those factors indicate the efficiencies of newer models.

6. 6.

   Given the equipment cost increases by 10% after each year and the downtime increases alongside productivity demands, how does this shape your operational management strategy?

   Hint

   Think about balancing costs and production requirements in making machinery decisions.