Intercom STEP Cost Benefit Analysis

Details	UOM	STEP	Manual Spray	Hand Operation solvent glue + brush
Product – Hand bags
Average gluing length per component	mm	700	700	700
Average number of components per handbag	Nos	6	6	6
Total gluing length per handbag	mm	4.200	4.200	4.200
Gluing speed (distance per second)	mm/sec	230	80	35
Working time per day (reducing 15% slack)	mins	510	510	510
Required production per day	bags	1.200	1.200	1.200
Gluing time required per day	mins	365	1.050	2.400
Manpower requirement	TM	3	6	12
Manpower average cost to company/per mounth	US$	150	150	120
Total manpower cost per month	US$	450	900	1.440
Total manpower cost per year	US$	5.400	10.800	17.280
Average glue required per 10 mm per component 450mm lenght	gr	0,8	1,0	4,0
Total glue required per day for 18000pcs	Kg	5,76	7,20	28,80
Waste	%	10	30	60
Total glue consumption per day	Kg	6,34	9,36	46,08
Glue cost per Kg	US$	8,00	8,00	2,50
Glue cost per year	US$	15.206	22.464	34.560
Cost of gluing operations / year	US$	20.606	33.264	51.840
Capital Cost
No. of Machines required	Nos.	1	6	12
Cost per machine	US$	25.000	2.800	15
Total cost of machines	US$	25.000	11.200	180
Depreciation	US$	5.000	1.000	36
Opportunity Cost of capital (10%)	US$	2.500		18
Power Consumption per year (1500 Watt)	KWh	2.739		–
Cost of power per year ($0.09 per KWh)	US$	247		–
Maintenance cost (Assumed at 3% incl. spares)	US$	750	150	5
Real Estate used (L x B = 3.5 M x 3.5 M)	SqM	12	12	15
Opportunity Cost of Real Estate ($M75/15000 SM)	US$	60.000		75.000
Total Capital Cost per year	US$	8.497		59