Engineering Economic Analysis

24 MAKING ECONOMIC DECISIONS

$185 a day (the round trip takes all day) and have

truck operatingcosts (excludingthe driver)of60fC

a mile. How much could each company save each

week if they shared the task, with eachs-ending its

truck twice a week and hauling the other comparifs

cargo on the return trip?

1-35 A city is in need of increasing its rubbish disposal

facilities. There is a choice of two rubbish disposal

areas, as follows.

Area A: A gravel pit with a capacity of 16 mil-

lion cubic meters. Owing to the possibility of

high ground water, however, the Regional Water

Pollution-Control Board has restricted the lower

2 million cubic meters of fill to inert material

only (earth, concrete, asphalt, paving, brick,

etc.). The inert material, principally clean earth,

must be purchased and hauled to this area for

the bottom fill.

Area B: Capacity is 14 million cubic meters.

The entire capacity may be used for general rub-

bish disposal. This area will require an average

increase in a round-trip haul of 5 miles for 60%

of the city, a decreased haul of 2 miles for 20%

of the city. For the remaining 20% of the city,

the haul is the same distance as for AreaA..

Assume the following conditions:

· Cost of inert material placed in AreaAwill be

.$2.351m3.

·Average speed of trucks from last pickup to dis-

posal site is 15 miles per hour.

·The rubbish truck and a two-man crew will cost

$35 per hour.

·Truck capacity of 41/2 tons per load or 20 m3.

· Sufficient cover material is available at all areas;

however, inert material for the bottom fill in Area

Amust be hauled in.

Which of the sites do you recommend? (Answer:

Area B)

1-36 An oil company is considering adding an additional
grade of fuel at its service stations. To do this, an addi-
tional3000-gallon tank must be buried at each station.
Discussions with tank fabricators indicate that the
least expensive tank would be cylindrical with mini-
mum surface area. What size tank should be ordered?
(Answer: 8 itdiameter by 8 ft length)

1-37 The vegetable buyer for a group of grocery stores
has decided to sell packages of sprouted grain in the

vegetable section of the stores. The product is per-

ishable and any remaining unsold after one week in

the store is discarded. The supplier will deliver the

packages to the stores, arrange them in the display

space, and remove and dispose of any old packages.

The price the supplier will charge the stores depends

on the size of the total weekly order for all the stores.

Weekly Order

Less than 1000 packages

1000-1499

1500-1999

2000 or more

Price per Package

35fC

28

25

20

The vegetable buyer estimates the quantity that can

be sold per week, at various selling prices,as follows:

Selling Price Packages Sold per Week

60fC 300

45 600

40 1200

33 1700

26 2300

The sprouted grain will be sold at the same price in

all the grocery stores. How many packages should be

purchased per week, and at which of the five prices

listed above should they be sold?

Cathy Gwynn, a recently graduated engineer, de-

cided to invest some of her money in a "Quick Shop"

grocery store. The store emphasizes quick service, a

limited assortment of grocery items, and rather high

prices. Cathy wants to study the business to see if the

store hours (currently 0600 to 0100) can be changed

to make the store more profitable. Cathy assembled

the following information.

1-38

Time Period

0600-0700

0700-0800

0800-0900

0900-1200

1200-1500

1500-1800

1800-2100

2100-2200

2200-2300

2300-2400

2400-0100

Daily Sales in

the Time Period

$ 20

40

60

200

180

300

400

100

30

60

20

The cost of the groceries sold averages 70% of sales.

The incremental cost to keep the store open, including

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