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    Cost analysis of robots replacing workers manufacturing kitc

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    I am a senior vice president of a company that manufactures kitchen appliances. I am considering using robots to replace up to ten of my skilled workers on the factory floor. Using a spreadsheet, I need to analyze the costs of acquiring several robots to paint and assemble some of my products versus the cost savings in labor.

    How many years would it take to pay for the robots from the savings in fewer employees, assuming that the skilled workers make $20 per hour, including benefits?

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    Solution Preview

    Since you don't supply the costs of the robots, I will assume a capital investment of $100,000 each and assume 1 robot will be able to replace two workers. If that is indeed the case, and assuming that human workers will work 2080 hours in a year (52*40). Also assuming $20 per hour for those employees.

    I am also assuming $10000/year in electricity consumption and other operating costs per robot and $10000 per year in ...

    Solution Summary

    ROI/Breakeven anyalysis for replacing human labor with robots. Brief discussion and spreadsheet.