Question

A manual arc-welding cell uses a welder and a fitter. The cell operates 2000 hr/yr. The welder is paid $30/hr and the fitter is paid $25.00/hr. Both rates include applicable overheads. The cycle time to complete one welded assembly is 15.4 min. Of this time, the arc-on time is 25%, and the fitter’s participation in the cycle is 30% of the cycle time.

A robotic arc-welding cell is being considered to replace this manual cell. The new cell would have one robot, one fitter, and two workstations, so that while the robot is working at the first station, the fitter is unloading the other station and loading it with new components. The fitter’s rate would remain at $25.00/hr. For the new cell, the production rate would be eight welded assemblies per hour. The arc-on time would increase to almost 52%, and the fitter’s participation in the cycle would be about 62%. The installed cost of the robot and workstations is $158,000.

Power and other utilities to operate the robot and arc welding equipment will be $3.80/hr, and annual maintenance costs are $3500. Given a 3-year service life, 15% rate of return, and no salvage value,

(a) determine the annual quantity of welded assemblies that would have to be produced to reach the breakeven point for the two methods.

Answer 1