Operations Cost & ROI calculations 1

[MParker31]

Hello, just join this site yesterday and I am looking for help in how to indentify the operations cost associated with running a piece of capital equipment.(Terminal Sterilizer)

Things I'm currently considering:

Cost to Buy
Expected Product Lifetime
Size
%Utilization, and maximum capacity
Cost to install
Cost to validate
Annual Revalidation Cost 1%
Cost of Annual Maintenance 03% of purchase price
Incrememtal Investment required ($)
Time need to load and unload

Is there anything short of purchasing an expensive software packaging that can help me arrive at a sollution. Maybe a spreadsheet or website with formulations.

Thanks for you help!

 

[IRstuff]

Don't know about expensive, but there are software packages for calculating logistics and life-cycle costs.

TTFN TTFN

 

[MParker31]

Thanks for the suggestion. Would you happen to know the names and company contact information.M.Parker

 

[tcampbe1]

One thing I would mention is to keep track of the difference between variable cost and fixed cost. The purchase price and installation are a fixed cost. You pay them even if you never use the machine for anything useful. Some maintenance might be fixed as well if it is a scheduled periodic event, regardless of use. Variable costs are the ones you pay on a per unit basis when you make something on the machine. When you are deciding whether to buy the machine you need a present value of all fixed and variable costs to compare to the alternatives without the machine. Once you have bought the machine and you are considering making other product on it, you want to limit yourself to variable cost, otherwise you may wrongly decide to use an alternative when you have capacity available at a much lower cash cost than you think. Since you are in the best position to know what is going on, I recommend making your own spreadsheet, rather than depending on some canned approach.

 

[IRstuff]

Cannot vouch for these myself, since I'm not directly involved in logistics:

http://www.sohar.com/services/ils/lcc.html

http://www.value-engineering.com/training.htm

http://www.lambdacorp.com/

http://www.lifecyclecost.com/

http://www.pre.nl/simapro/default.htm

http://www.relexsoftware.com/products/lcc.asp

These may be somewhat off from what you specifically need, since most of these address LCC from a logistics, reliability and maintainability perspective.
TTFN