Sensitivity analysis result based on order period.... Our team decided to come up with the idea of applying 3D printing technology to design and manufacture parts for sewing machines in
Operational COSÌ - - nh TH TH HH KT KH tệp 8
Regular maintenance is essential for all machinery to prevent damage and ensure smooth operation For the Anycubic Kobra 2 3D printer, users should perform maintenance every three months, with an average cost of 1,000,000 VND per service.
Maintenance cost = 1,000,000 x 4 = 4,000,000 VND/year 3.1.2.2 Utilities cost
As mentioned above, it takes about 39 days to fully print 150 molds, which is similar to:
So the total watt accounts for
According to the data provided, Vietnam Electricity Group values 1kWh equivalent to 1,772,100 VND for businesses
It is necessary to hire a full-time 3D printing engineer to control and print stuff from the
FINAL PROJECT — ENGINEERING ECONOMY ¢3 machines The estimated salary to pay for this employee will be around 7,000,000 VND/month, which means:
Salary = 7,000,000 x 12 = 84,000,000 VND/year 3.1.3 Salvage value
After five years of use, 3D printing machines retain a salvage value, indicating they still hold worth despite their age Typically, the minimum depreciation period for a 3D printer is seven years, allowing us to calculate its salvage value after five years of operation.
Alternative 1 COSt SUMMATY eee
In summary, types of costs are listed as follows:
AILErM ative 2 oo
Capital INVESTMENT ooo ee - -c HH TH ki HH KH KH kh 10
To kick off an outsourcing plan, businesses must consider choosing a contractor as well as the costs involved in creating a new purchasing department Based on the down-scaled project
FINAL PROJECT — ENGINEERING ECONOMY ¢3 model, the initial cost for this alternative proposed by employees in the referenced business is determined to be:
The mold manufacturer is tasked with designing and producing supporting molds based on the garment factory's orders The design cost is calculated based on the time required for completion, which in this case is approximately 17 hours at a rate of 300,000 VND per hour Consequently, the total design cost for one year, covering four orders, amounts to 20,400,000 VND.
The manufacturing cost is calculated by the amount of time needed to print the products Therefore, considering the size of the mold and breaking it into smaller angles:
To determine the time required to build a row, divide the object's width (W) by the construction speed (B) For instance, with a width (W) of 150mm and a construction speed (B) of 500mm/s, the calculation yields the time needed to complete the row.
Then, calculate the number of layers: divide the object's height (H) by the layer height (L) Assuming a layer height of 0.2mm, the number of layers is:
To determine the number of rows, divide the length of the object (L) by the nozzle width (N), which is 0.4mm This calculation will yield the total number of rows needed for the print.
To estimate print time, multiply the number of rows by the time required to build a single row, and then multiply that result by the total number of layers This calculation will provide you with the estimated printing time.
0.3 x 500 x 100 = 15000 seconds ~ 4.16 hours Finally, determined the cost for printing: for a quarter, the garment manufacturing department demands 150 3D support parts, so the manufacturing cost for a quarter is:
The manufacturing cost for one year is:
16875000 x 4 = 69,888,000 VND per year Table 2 Printing pricing table
Before returning products to the garment factory, it is essential to conduct quality control An employee will assess and provide feedback on the effectiveness of the support parts during both the testing phase and the final evaluation This role guarantees that support parts meet performance standards, ensuring they function optimally without damage or deviation.
In this way, the production process will reduce downtime and the support part can effectively promote its features
The employee receives a monthly bonus salary of 9,000,000 VND, but due to the garment industry's quarterly ordering schedule, the bonus is awarded only four times a year Additionally, quality control costs are incurred in the process.
After passing the quality check, if the product batch meets the design specifications of the garment factory, a tricycle will transport the items to the site, incurring transportation costs The journey from the 3D printing manufacturer in Ho Chi Minh City to the garment factory in Long Thanh, Dong Nai spans approximately 60 km, which contributes to the overall transportation cost for each order.
300,000 x 6 = 1,800,000 VND Then, the total transportation cost for a year is:
Alternative sô
Alternative 3 COSt SUMMALY © ec
ANALYSIS OF ALTERNATIVES - LH HH HH 16
Rate of Return analysis for each alternafiVe HH nh kh 16 1 Rate of Return analysis for alternative †1 (AT) ch khe ky 17 2 Rate of Return analysis for alternative 2 (A2) ng kh ki, 17 3 Rate of Return analysis for alternative 3 (A3) ch ky 18 4.3 Rate of Return analysis with incremental cash flow L ST SH 18
Firstly, we will implement a ROR analysis between each alternative and the do-nothing alternative
We can immediately eliminate the alternative with the ROR value lower than MARR value (20%)
4.2.1 Rate of Return analysis for alternative 1 (A1)
Table 5 Summary of cash flow for alternative 1
PERIOD (Year) CASH FLOW A1 (VND)
The rate of return equation based on the PW of incremental cash flows is:
By utilizing the IRR function in Excel, it is possible to find out that Ai* = 38.3482%
Because the calculated rate of return of 38.3482% is greater than the 20% MARR, we can conclude that the alternative 1 is selected
4.2.2 Rate of Return analysis for alternative 2 (A2)
Table 6 Summary of cash flow for alternative 2
PERIOD (Year) CASH FLOW A2 (VND)
The rate of return equation based on the PW of incremental cash flows is:
By utilizing the IRR function in Excel, it is possible to find out that Ai* = 25.4915%
Because the calculated rate of return of 25.4915% is greater than the 20% MARR, we can conclude that the alternative 2 is selected.
4.2.3 Rate of Return analysis for alternative 3 (A3)
Table 7 Summary of cash flow for alternative 3
PERIOD (Year) CASH FLOW A3 (VND)
The rate of return equation based on the PW of incremental cash flows is:
Using the IRR function in Excel, we determine that Ai* equals 11.8756% Since this calculated return rate of 11.8756% is below the 20% Minimum Acceptable Rate of Return (MARR), we conclude that alternative 3 is not viable.
4.3 Rate of Return analysis with incremental cash flow
Having acquired the benefits of incremental analysis, we conduct an incremental cash flow with a MARR of 20% per year to compare the 2 selected alternatives 1 and 2
Table 8 Incremental Cash Flow Tabulation
CASH FLOW A2 CASH FLOW A1 INCREMENTAL
CASH FLOW PERIOD (Year) (VND) (VND) (VND)
The rate of return equation based on the PW of incremental cash flows is:
By utilizing the IRR function in Excel, it is possible to find out that Ai* = 41.0667%
Because the calculated rate of return of 41.0667% is greater than the 20% MARR, we can conclude that the alternative 1 is the suitable selection
Sensitivity analysis is a method used to evaluate how varying independent variable values impact a specific dependent variable based on certain assumptions In our project, we will utilize this technique to analyze our decisions and the potential uncertainties involved The most uncertain factors in our model include the required product quantity for each period and the duration of each order period We previously indicated that the first alternative is more economically viable In the upcoming sections, we will conduct two sensitivity analyses to explore the effects of these variables and identify the range within which our selected solution remains favorable.
4.4.1 Sensitivity analysis based on product quantity
Our sensitivity analysis will examine how variations in the target product quantity, ranging from 80 to 250 units, impact the IRR of incremental cash flow We limit our focus to this range because exceeding 250 units would necessitate purchasing additional 3D printing machines to meet higher quarterly demands, resulting in complex cash flow adjustments that fall outside the scope of this analysis.
This analysis will evaluate the changes in cash flow elements for two alternatives based on variations in product quantity Alternative 1 focuses on the material costs incurred in year 0, while Alternative 2 examines the annual manufacturing costs.
We recalculated the annual costs and performed an incremental cash flow analysis for each scenario To determine the rate of return, we utilized the IRR function in Excel, which was based on the cash flow data.
Table 9 Sensitivity analysis result based on product quantity
Sensitivity Analysis Based on No of Products
Figure 9 Sensitivity analysis graph based on product quantity
The analysis reveals that producing between 70 and 250 units yields positive Internal Rate of Return (IRR) values However, to align with the Minimum Attractive Rate of Return (MARR) set at 20%, the factory must produce at least 90 units If production falls below this threshold, the factory should consider outsourcing as outlined in alternative 2 Conversely, for production levels of 90 units or more, the proposed solution in alternative 1 remains the more economically viable option.
4.4.2 Sensitivity analysis based on order period
We aim to conduct a sensitivity analysis to examine how the interest rate of return on incremental cash flow fluctuates as we adjust the order period from 2 to 6 months, incrementing by 0.5 after each scenario We initiate this analysis at 2 months because our 3D printer for Alternative 1 requires 39 days of operation to produce 150 products.
To assess the impact of altering the order period on cash flow, we will evaluate the associated costs This analysis includes Alternative 1, which encompasses material costs in year 0 and annual maintenance costs Additionally, Alternative 2 will be examined, covering annual expenses related to manufacturing, quality control, transportation, and design.
After recalculating all costs and adjusting the cash flow, we will utilize Excel's IRR function to determine the interest rate of return based on these cash flows.
Table 10 Sensitivity analysis result based on order period
The analysis indicates that order periods of 8 to 12 months can be excluded due to their unrealistic negative IRR values exceeding -100% To gain a clearer understanding of the viable scenarios, we will graph the remaining options alongside a line representing the Minimum Acceptable Rate of Return (MARR) set at 20%.
Sensitivity Analysis Based on Order Period
Figure 10 Sensitivity analysis graph based on order period
Looking at the graph, we can easily come to an inference that whenever the period is below
After five months, the Internal Rate of Return (IRR) exceeds 20%, indicating that Alternative 1 remains the superior choice However, once the period surpasses five months, we will transition to Alternative 2.
AHP approach considering economic, social and environmertal factors
The evaluation of project alternatives involved assessing economic feasibility, but successful implementation requires consideration of additional factors Utilizing the triple bottom line framework, which emphasizes the importance of economic, environmental, and social dimensions, is essential for building a sustainable business.
Evaluating alternatives through the triple bottom line enhances decision reliability by incorporating non-economic factors This approach provides a comprehensive understanding of a project's impact on the environment and society, reflecting a crucial trend in modern business development.
When evaluating and selecting options, Multiple Criteria Decision Making (MCDM) plays a crucial role This method enhances our understanding of decision-making by assessing its benefits and drawbacks As a sub-discipline of operations research, MCDM focuses on the integration of multiple criteria, facilitating a comprehensive evaluation process that considers various factors simultaneously.
The Analytic Hierarchy Process (AHP), developed by Saaty in the late 1970s, is a widely used Multi-Criteria Decision-Making (MCDM) method that simplifies complex decision problems into hierarchical structures This method assesses the weight of each criterion and alternative through pairwise comparisons, with priorities determined using the Eigenvector method When evaluating the reliability of a collector, the AHP approach involves a systematic series of steps to ensure accurate decision-making.
1 Identify the Evaluation Criteria: Determine the criteria that are important for evaluating the reliability of the collector These could include factors like the quality of the collected materials, the efficiency of the collection process, the satisfaction of the suppliers, recyclers, remanufacturers, and repairers, and the percentage of collected materials that can be recycled, reused, remanufactured, and otherwise
2 Assign Weights to the Criteria: Assign weights to each criterion based on its importance The weights can be determined through expert judgment or using techniques like the Analytic Hierarchy Process (AHP)
3 Evaluate the Collector on Each Criterion: Evaluate the performance of the collector on each criterion This could involve collecting data, conducting surveys, or using other evaluation methods
4 Aggregate the Evaluations: Aggregate the evaluations to obtain a final score for the reliability of the collector This could be done using techniques like the Weighted Sum Model (WSM) or the Weighted Product Model (WPM)
Utilizing the MCDM approach allows for a thorough and precise assessment of alternative options, facilitating better-informed decision-making in selecting the optimal choice for enhancing 3D printing projects.
Our project utilizes the AHP model and the Triple Bottom Line framework, which encompasses economic, environmental, and social criteria In a pairwise comparison of these three criteria, businesses prioritize economics as the most significant factor, assigning it a weight approximately three times greater than that of environmental considerations and seven times greater than social factors Additionally, the environmental factor is deemed substantially more important than the social factor, with a weight roughly five times higher.
In our economic analysis, we will assess the significance of Alternative 1 and Alternative 2 using their Internal Rate of Return (IRR) values Alternative 1 boasts an IRR of 38.35%, while Alternative 2 has an IRR of 25.49% This indicates that Alternative 1 is 1.5 times more significant than Alternative 2, calculated by the ratio of their IRRs (38.35%/25.49%) We will incorporate this factor into a pairwise comparison matrix for further evaluation.
When evaluating the environmental impact of 3D printing, it's crucial to analyze the entire life cycle of printed products, including the materials and energy consumed during production Although 3D development can minimize waste and transportation emissions, it is not inherently sustainable due to the environmental harm caused by manufacturing 3D printers and their materials Key considerations include resource utilization for self-production—such as raw material usage, energy consumption, and waste generation—as well as the carbon footprint from outsourcing, which encompasses transportation emissions, supplier sustainability practices, and packaging Additionally, sustainability practices like recycling, waste management, and environmental certifications of outsourcing partners are vital Experts will assess these factors using the Analytic Hierarchy Process (AHP), revealing that outsourcing (alternative 2) is approximately three times more environmentally favorable than self-production (alternative 1) based on pairwise comparison matrix calculations.
When evaluating social criteria, it's essential to consider factors such as employee job satisfaction, internal job creation through self-production, external job opportunities via outsourcing, health and safety standards, and work-life balance Experts suggest that self-production significantly outperforms outsourcing, estimating it to be approximately twice as beneficial based on a pairwise comparison matrix.
Table 11 AHP pairwise matrix for criteria Criteria Economic Environmental Social
Table 12 AHP pairwise matrix for economic weight
Table 13 AHP pairwise matrix for environment weight
Table 14, AHP pairwise matrix for social weight
After a thorough analysis utilizing the Analytic Hierarchy Process (AHP), we have reached a significant conclusion The AHP method, a systematic approach for organizing and evaluating complex decisions, has enabled us to effectively compare and rank our alternatives.
Our analysis compared two options: self-production and outsourcing After thorough evaluation, we concluded that self-production is significantly more advantageous than outsourcing.
The Overall Consistency Index (Cl) values indicate a preference for Alternative 1, which has a Cl value of 0.506, compared to Alternative 2's Cl value of 0.494 Consequently, we have chosen to proceed with Alternative 1, as investing in self-production is expected to deliver substantial benefits and profits for our organization This decision aligns with our strategic objectives, enabling us to maintain control over the production process and ensure the quality and efficiency of our operations.
FINAL WEIGHT TABLE Economic Envinronmental Social
V RESULT 5.1 Selection of the best alternative
Selection nsbi ng an ae e
Alternative 1: self-production effectively meets various conditions through precise analytical data and methodologies Additionally, the article addresses certain limitations and offers recommendations for future project implications.
Analyzing real-world cases, such as the application of 3D printing in the rapidly growing garment industry, is highly beneficial for researchers and students alike, as it allows for the practical application of theoretical knowledge from engineering economy This approach fosters critical thinking, decision-making, and communication skills while sparking curiosity in new fields Ultimately, a deep investigation into such projects equips students with valuable insights and experiences, preparing them effectively for their future careers.
CONCLUSION =4
Alternative 1: self-production effectively meets diverse conditions through detailed analytical data and methodologies Additionally, the article addresses certain limitations and offers recommendations for future project implications.
Analyzing real-world cases, such as the impact of 3D printing in the garment industry, offers significant benefits for researchers and students alike, allowing them to apply theoretical knowledge from engineering economy to practical challenges This process enhances critical thinking, decision-making, and communication skills while fostering curiosity about emerging fields By deeply investigating this promising and competitive sector, students gain valuable insights and experience, better preparing them for their future careers.