1.5. Loss in Productivity

Try these first

1. 1.

   What is the downtime cost per hour when the equipment cost is 900 rupees at 3%?

   Hint

   Remember to use the percentage to calculate the cost.

2. 2.

   How many hours does the machine operate in a year as per the given data?

   Hint

   This information is specifically mentioned.

3. 3.

   What is the downtime cost per hour if the cost of equipment is 900 rupees and the downtime percentage is 3%?

   • 27 rupees
   • 54 rupees
   • 18 rupees

   Hint

   Think about the percentage calculation.

4. 4.

   True or False: Cumulative downtime costs decrease as a machine ages?

   • True
   • False

   Hint

   Consider what happens to costs over time.

5. 5.

   Calculate the quarterly obsolescence cost for a machine that has an obsolescence factor of 0.05 for the second year.

   Hint

   Think about breaking down the annual operation into quarters.

6. 6.

   Discuss how a company could balance the costs of older machines with productivity gains from newer models.

   Hint

   Factor in both current expenditure and potential savings from efficiency.