MACHINING VS. CASTINGPROPOSALREQUEST FOR QUOTEMANUFACTURING PROCESSSlide 5CASTING Vs. MACHININGSlide 7SENSITIVIY ANALYSISSENSITIVITY ANALYSISCONCLUSIONRESOURCESHELPFUL WEBSITESMACHINING VS. CASTINGEGR 403GROUP 7BRIAN JACOBSMICHAEL MAYERNOAH WINSORMATTHEW YESETAPROPOSALPERFORM COST ANALYSIS ON 2 DIFFERENT PROCESSESMACHINING Vs. CASTINGDETERMINE WHICH PROCESS IS ECONOMICALLY BENIFICIAL BASED ON NET PRESENT WORTH ANALYSISREQUEST FOR QUOTE4 FIN IMPELLER – PERSONAL WATERCRAFT APPLICATION6061-T6 ALUMINUM ALLOY3500 PIECES PER YEARMARR IS 12.5%INFLATION IS 3.5%MANUFACTURING PROCESS5-AXIS HIGH SPEED CNC MACHININGMANUFACTURING PROCESSMOLTEN ALUMINUM DIE CASTING“SQUEEZE CASTING”CASTING Vs. MACHININGOPERATION COST $200,000$150,000$100,000$50,000$0$50,000$100,0001 2 3 4 5 6 7COSTMACHININGCASTINGEQUIPMENTMATERIALSENERGYMAINTANANCELABORRECYCLINGSALVAGECASTING Vs. MACHININGOVERALL PROGRESS 10 YEARS$0.00$100,000.00$200,000.00$300,000.00$400,000.00$500,000.00$600,000.00$700,000.00$800,000.00$900,000.00$1,000,000.001 2 3 4 5 6 7 8 9 10 11YEARSBENEFITS-COSTtotal cost-benefit10yearscastingtotal cost-benefit10yearsmachiningSENSITIVIY ANALYSISFOR BOTH OPTIONS, CHANGE IN TOTAL INCOME HAD THE MOST EFFECT–20% CHANGE IN INCOME RESULTED IN 30% CHANGE IN PRESENT VALUE (HIGH/LOW)–FOR CASTING, ELECTRICITY WAS SIGNIFICANT AS WELL (LARGER AMOUNT = HIGHER SIGNIFICANCE) SALVAGE LEAST SIGNIGFICANTSENSITIVITY ANALYSISMatching PW (casting energy decreases)$2.00$2.50$3.00$3.50$4.00$4.50(Millions)Cost of Energy for CastingPWMachiningPW CastingPWCONCLUSIONWE CHOSE THE MACHINING PROCESS –EQUIPMENT COST AND MAINTENANCE WERE HIGHER BUT COST OF RUNNING OPERATION MUCH LOWER–HIGH REMOVAL AMOUNT OF MATERIAL MADE UP WITH RECYCLING RETURN–LONGTERM USEFUL LIFE–LABOR COST HIGH BUT LABOR MORE SKILLED AND VERSATILE–HIGHLY ADAPTABLE PROCESSRESOURCESHASS AUTOMATION, INC.E-BAYCALIFORNIA EDISONIMS METALSHELPFUL WEBSITEShttp://www.treasury.gov/–THIS IS A GOOD SITE FOR INFORMATION ABOUT THE OVERALL ASPECTS OF THE ECONOMYwww.cfo.com–THIS IS A GOOD SITE FOR INFORMATION ABOUT RUNNING A
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