Tradeoff Analysis paper: calculate the costs of each option, then discuss other factors that are relevant for an FM deciding on the presented options.
You are a facilities manager. The Visitors Center roof, which is a 10,000-square foot building, must be replaced. The revenue loss per week for the facility being out of operation is $10,000. Your architect has provided you with three options:
â?¢ Asphalt shingles
o Installation cost: $20 per square (10-foot by 10-foot area)
o Lifecycle: 20 years
o Installation period: 1 week
o Installation cost: $50 per square (10-foot by 10-foot area)
o Lifecycle: 40 years
o Installation period: 3 weeks
â?¢ Composite tile
o Installation cost: $35 per square (10-foot by 10-foot area)
o Lifecycle: 30 years
o Installation period: 2 weeks
â?¢ Prepare a 900-word paper in which you explain tradeoffs between lifecycle and first cost analyses in terms of risk and cost.
â?¢ Describe and explain the tradeoff between lifecycle and first cost analyses for each option. Which option is best? Why? How do reactive, planned, preventive, corrective, and predictive maintenance activities factor into your decision?
â?¢ Format your paper according to APA standards© BrainMass Inc. brainmass.com October 25, 2018, 3:10 am ad1c9bdddf
This work is to be treated as a guideline to assist you with this assignment. At no time is it intended to be a final submission work and I discourage you from using it as such. Points made and topics discussed in this work should be researched further and validated by the student prior to utilizing it in their own work which will be complied for final submission to their schools. I have included this response in an MS Word document to assist you with your final editing.
Initial Trade-Off Analysis
1. Asphalt shingles first costs:
$20 per 10ft x 10ft square @ 10000 sq. ft. = $20000
1 week installation @ $10000 revenue loss/week = $10000
Total expense = $30000
20 year lifecycle
$30000 / 20 years = $1500/year cost of product
2. Tile shingles first costs:
$50 per 10ft x 10ft square @ 10000 sq. ft. = $50000
3 week installation @ $10000 revenue loss/week = $30000
Total expense = $80000
40 year lifecycle
$80000 / 40 years = $2000/year cost of product
3. Composite tile first costs:
$35 per 10ft x 10ft square @ 10000 sq. ft. = $35000
2 week installation @ $10000 revenue loss/week = $20000
Total expense = $55000
30 year lifecycle
$55000 / 30 years = $1833/year cost of product
No consideration for defect or breakage has been applied to the costs listed above. It is considered customary to adjust cost estimates by as much as 10% (based upon the product) to accommodate these variables. Additionally, no "true cost of ownership (TCOO)" calculations have been made. Variables that effect TCOO can include periodic planned maintenance expenses, corrective maintenance expenses and reactive maintenance expenses.
Let's first discuss the various forms of maintenance involved with facilities management and their application to this project:
1. Reactive Maintenance: this form of maintenance is performed in response to a product, a piece of equipment or system failure or breakage. ...
The expert calculates the costs of each option, then discusses other factors that are relevant.
Lease versus Buy Decision Discussed
XYZ is trying to determine to lease or buy a new computer system. Tax rate is 35%and the cost of debt is 5.5%(after tax).
Lease-Annual beginning of the year payments of payments of 25,000 are required over 5 years. The lessor wil pay maintenance costs, the lessee will pay insurance and other cost. The lessee will exercise its option to purchase the asset for 32,000 in the final lease payment.
Purchase-The $100,000 cost can be financed entirely with 7.5% loan requiring end of year payments of 24,316 for five years. The MACRS five year recovering program will be used. The firm will pay $3500 per year for a service contract; the firm will pay insurance and other costs. The firm plans to keep the equipment beyond its 5 year life.
Should they lease or buy?
How would set this up in excel?View Full Posting Details