Replacement Analysis (Team 3) Economic Analysis Team Project Repair or Replace Old Computers California State Polytechnic University, Pomona Winter Quarter, 2008
Team Members • Paul S. Cobian -Organizer • Mynor Piedrasanta -Techie • Spencer Lee -Summarizer California State Polytechnic University, Pomona
Replacement Analysis Equipment: Retained or replaced? Defender Challenger Reasons -Obsolescence -Depletion -Deterioration Analysis Technique 3 Compare EUAC Defender – remaining useful life Challenger – minimum cost life
Defender 50 Computers No salvage value Annual Maintenance: $5,000 Increasing by $750 annually Productivity: $50 per computer (decreasing 5% annually) Labor costs: $18 per hour with 3% annual increase.
Challenger 1 (Dell Vostro) $896 per computer 1.6 Ghz 512 MB RAM 80 GB Hard drive Software $33 per computer increases $5 per year Productivity: $350 per computer Decreasing by 5% Maintenance first 3 years free, $50 per computer w/ $10 incr. annually Labor costs: $18/hr with 3% annual incr.
Challenger 2 (HP xw4600) $1545 per computer Duo core 2.33 Ghz 1 GB RAM 250 GB Hard drive Software $33 per computer increases $5 per year Productivity: $525 per computer Decreasing by 5% Maintenance first 3 years free, $50 per computer w/ $10 increase per year Labor costs: $18 per hour with 3% annual increase.
Challenger Comparison HP Wins!
Sensitivity AnalysisHP vs. Dell HP Wins
Defender vs. Hp HP Wins
Overall Analysis HP Computer Best Option Better alternative (EUAC + Sensitivity) High productivity offsets high cost