Compactor Bin Replacement Assessment Recommendation
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This essay provides a critical analysis of compactor bins and recommends necessary replacements. It includes an assessment of the maintenance cost of the asset and the advantages of replacing it. The essay concludes that replacing the asset is more advantageous for the company.
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Running head: COMPACTOR BIN1 Compactor Bin Student’s Name Institutional Affiliation
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Running head: COMPACTOR BIN2 Compactor Bin Introduction Assetconditionassessmentreferstothesystematicexamination,evaluation, measurement and analysis of the consequential data1. Asset assessment helps to display the condition of a particular asset with a fundamental aim of determining the need of some anticipatory or counteractive action. It helps to know the remaining usefulness of an asset and assets capability to meet performance requirements2. The assessment process involves two main processes. First, defect inspection which is designed to determine the need for maintenance and temporary works and it is carried out in more frequent basis3. Second and the last one is the overall and more detailed asset assessment which is designed to assess the overall condition and 1Cruz, Pedro Eduardo. "A life cycle approach to understand major causes during a LPG plant accident and establish Asset management guidelines for its further redevelopment." InAsset Management Conference (AM 2016), pp. 1-21. IET, 2016. 2Jensen-Juul, Malene. "PhD defence: Quantification of rural livelihood dynamics: environmental resource use, asset accumulation, poverty and livelihood strategies." (2017). 3Löffler, Konstantin, Thorsten Burandt, Karlo Hainsch, Pao-Yu Oei, and Christian von Hirschhausen. "Modeling the Low-Carbon Transition of the European Energy System–A Quantitative Assesment of the Stranded Asset Problem." InTransforming Energy Markets, 41st IAEE International Conference, Jun 10-13, 2018. International Association for Energy Economics, 2018.
Running head: COMPACTOR BIN3 the remaining useful life of an asset4. Therefore, this essay is brought forth to critically analyze compactor bins and provide necessary recommendations for replacement. Section One Source replacement of an asset usually has its own cost as it takes in the need of investment in the replacement asset5. The replacement process may be of much cost than maintaining the existing one6. There are some conditions that may force one to reinvest in replacement of an asset. Firstly, if the maintenance cost of the asset per year is high, that you can be able to buy a new asset after every five years, it will be of no use to stick on the asset yet when you replace every five years you will have no maintenance cost for more than 50 years. Secondly if the condition of an asset is beyond repair, it will call to the need of replacement7. According to Wendling 2012, particular organizations tend to engage in asset 4Mantra, I. G. N. "The Modeling of Information Security Classification With Risk Value Assesment Factor to Good Information Governance on The Indonesia Higher Education Sector."JURNAL TEKNIK INFORMATIKA DAN SISTEM INFORMASI3, no. 1 (2016): 12-22. 5Murtianingsih, Murtianingsih, and Anas Hari Setiawan. "The Implementation of Fair Value on Short Term Assesment of Biological Assets."Journal of Accounting and Business Education1, no. 1 (2016): 40-55. 6Nasarudin, Indo Yama. "Analysis of Abdi Kerta Rahardja Union Health Assesment."Etikonomi15, no. 2 (2016). 7Pansa, Giorgio, and Enrico De Angelis. "Cost-optimal analysis of building renovation strategies and the assesment of the “renovation potential” of a built asset."Tema: Technology,
Running head: COMPACTOR BIN4 replacement due to obsolescence8. Also, Martin (2006), claims that an organization may replace an asset due to changes in law regulations technology and operational requirements9. And finally, Theron (2016) claims that some companies look at them as financial lose thus conductingtheirassetreplacementoperationswhiletheassetsarestillintheirgood conditions10. Secondly, physical asset deterioration presents higher risk to the company operations thus calling for asset replacement operations11. Followingthesourceofthereplacementoftheassetsintermsoflifecycle management and sustainability, various costs have to be incurred from the source to the company. Firstly, a transportation cost estimated at one unit per week factoring out the cost of per unit is forty thousand leads to a cumulative transport cost of $1920000 per year. Installation of the new compactor bins calls for experts from the source with adequate technological knowledge to fix the new compactor bins. Therefore, a constant installation cost Engineering, Materials and Architecture1, no. 2 (2015): 112-117. 8Prasetyo, Sigit, and Yudho Giri Sucahyo. "Information security risk management planning: A case study at application module of state asset directorate general of state asset ministry of finance." InAdvanced Computer Science and Information Systems (ICACSIS), 2014 International Conference on, pp. 96-101. IEEE, 2014. 9Rimsha, Andrew S., and Alexander A. Zakharov. "Method for Risk Assesment of Industrial Networks' Information Security of Gas Producing Enterprise." In2018 Global Smart Industry Conference (GloSIC), pp. 1-5. IEEE, 2018. 10Neaxie, Lidya Vega, and Puspita Kencana Sari. "The Security RisN Analysis On The Information Technology Infrastructure Of An Internet Service Provider." (2015). 11Rinaldi, Stefano, Paolo Ferrari, Alessandra Flammini, Matteo Loda, and Mattia Rizzi. "Distributed measurement system for the assesment of IEC 61850 transfer time in smart grid." InInstrumentation and Measurement Technology Conference Proceedings (I2MTC), 2016 IEEE International, pp. 1-6. IEEE, 2016
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Running head: COMPACTOR BIN5 of 5000 per week should be incurred leading to a total annual cost equivalent to $240000. Furthermore, a variable labour cost of $20000 per unit is charged leading to an annual cost of $4800000 figuring out that five units of labour are essential every week. The fact that the compactor bin variety is a new model that requires new skills calls for the training and development of the employees to enhance sustainability within the organization. Therefore, the $10,000 training and development cost estimated at a frequency of five units per week accumulates to $2400000 annual cost. For the health of the workers in the company, there is a need to maintain a proper disposal of the old compactor bins for operational sustainability through accidents prevention. Therefore, a disposal cost of &10,000 incurred every week accumulates to a $480000 annual disposal cost.Lastly, the new compactor bins are bought from a foreign manufacturing company at a cost of $500000 per unit leading to an annual cumulative cost of $24000000. In summary the replacement cost of the new compactor bins costs $33840000 per year which is a sum lesser than the maintenance cost. Section 3 In our situation we might roughly estimate the maintenance cost of the asset under consideration to be as follows. Firstly, the metallic spars are required. Considering the fact that 50 units of the metallic spares are required weekly with a cost per unit estimated to be $100000, then as per the calculations indicated in the excel sheet 24million is necessary as an estimated annual cost for the metallic spares. Additionally, the moving parts of the compactor bins are also essential at a frequency of 20 units per week. Figuring the fact that the estimated cost per unit is 20 thousand, then the entire cost accumulates to 19.2 million US dollars per year. Additionally, plastic spares are required at a frequency of 50 units per week estimated at a
Running head: COMPACTOR BIN6 cost of twenty thousand per unit. Therefore, cumulatively as derived in the excel sheet 48 million US dollars are necessary to cater for the plastic spares.Pipes are essential at a frequency of ten units per week estimated at a cost of forty thousand per unit. Cumulatively as derived on the excel sheet pipes result into a 2.16 million US dollars’ annual cost. Additionally, the transportation cost of the spares is required at an estimate frequency of 10 units. Figuring out that the transportation cost per unit is forty thousand, then the cumulative cost of transport per year is 1.92 million US dollars.The maintenance cost of the compactor bins is also labour intensive estimated at seven units per weak. Therefore, provided that the cost per unit of labour is 20 thousand dollars, then the cumulative annual labour cost as shown in the excel sheet is 8.64 million dollars. Finally, the maintenance of the compactor bins calls for the oiling of the moving parts estimated at a frequency of 7 units per week. Therefore, the cumulative oiling cost per year amounts to 672 thousand US dollars. In total, the maintenance cost of the compactor bins in the company is high estimated to be $337,872000. Section 4 According to the assessment of the work and the results of spreadsheet above it will be good for the company to implement a new compactor bin since the cost of retaining the older one seems to be higher. For instant the new compactor bin will have its metallic parts in good condition, there will be no cost for replacing the metallic parts. Transportation cost will lower since the materials to be collected by the company will be few. On the other hand, the cost for fixing the moving parts will be avoided and this will have a general impact on the cost of the compactor bin.
Running head: COMPACTOR BIN7 In addition, the plastic parts of the compactor bin will be in good condition, hence there will be no reason to spend more in buying new parts and replacing cost will also be avoided. However, since the new compactor is still strong and there is no wear out of the moving parts yet, the oiling cost will be minimum and sometimes it will not be incurred at all. In the years to come the company will be capable of buying new assets every year and installing it, this will see the company ran for many years without incurring any maintenance cost. Based on the feasible advantages it will be the best foregone idea for the company to replace the asset. This is because the cost of maintaining the present asset is higher than replacing it with a new one. Email To:The managers email From:Student’s email Subject:Compactor Bins Replacement Assessment Recommendation
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Running head: COMPACTOR BIN8 According to the assessment of the asset replacement, it is important to note that some times the cost of maintaining an asset might be as much as ten times the replacement cost of an asset. Asset that has been there for a very long time might end up demanding more cost for its maintenance and stability in functioning than what it gives back to the company in return. In addition, the company might run in a lose without notice if no much care is taken and assessment of the asset is not done at the end of every financial year. For instant, in compactor bin which is of our concern, the more it stays the more it will fail to work to its best. Compacter bin as it is well known has metallic parts that will automatically wear out as time goes by hence need of replacement. Replacement cost for this metallic might be much expensive to buy, in terms of transportation, in terms of fixing labor and lastly in terms of need of skilled personnel to fix ore repair the worn out metals parts. Secondly the compactor bins have plastic parts which are fragile and are prone to breakages. This means the more the compactor bin stays the more the need of replacing the plastic parts. Thirdly the moving parts in the compactor bin will wear out with time thus the need for oiling the parts throughout for it functioning condition to be conducive. The cost of buying the oiling facilities might be that much expensive in terms of transportation cost for the person collecting the oils daily. On the other hand, the piping cost is high as the pipes tent to be damaged by the rodents thus the company will use a lot of money buying and replacing the pipes.
Running head: COMPACTOR BIN9 Replacement of an asset will be the best foregone action for the manager to take12. For the new asset the cost that will be that of acquiring the compactor bin the transportation of the new bin preparation of the site for installation and the installation of the compactor bin which is much cheaper than that of maintaining the compactor bin. As per the estimation of maintenance cost for the asset which is almost 337872000 is much higher than that of installing a new asset which is estimated at 9120000 which is 38 times less than the maintenance cost. According to the data obtained, the installation of new compactor bin will be of much benefit for the company rather than maintaining the existing one. In terms of health, the workers will be in good condition since the new compactor bin will be free from leakages than can cause contamination which might cause diseases. Also the life cycle of the compactor bin will last longer for more than five years hence some expenses will be avoided. To conclude it will be advisable for the manager to adapt the new compactor bin for it will be advantageous for the company unlike maintaining the older one which will be disadvantageous. Yours faithful, Signature Student’s Name. 12Warren, Nicholas, Benjamin Garrard, Elliot Staudt, and Jelena Tesic. "Transfer Learning of Deep Neural Networks for Visual Collaborative Maritime Asset Identification." In2018 IEEE 4th International Conference on Collaboration and Internet Computing (CIC), pp. 246-255. IEEE, 2018.