Nicholas is the facilities manager for Green Market Groceries. The store is remodeling and wants to determine which brand of freezer to use for its frozen goods section. The freezers vary by size, cabinet type, accessibility, refrigerant, and interliner. These variables affect both the purchase cost and the operating cost (e.g., energy consumption) of each freezer. Currently, the cost of energy per kilowatt hour (kwh) is $0.10. Green Market expenses capital purchases over a three-year period. Given the cost and capacity data below, calculate the “productivity” (i.e., the cubic feet of freezer space per dollar) for each freezer alternative. Which freezer brand would you recommend to Nicholas?

Question

Nicholas is the facilities manager for Green Market Groceries. The store is remodeling and wants to determine which brand of freezer to use for its frozen goods section. The freezers vary by size, cabinet type, accessibility, refrigerant, and interliner. These variables affect both the purchase cost and the operating cost (e.g., energy consumption) of each freezer. Currently, the cost of energy per kilowatt hour (kwh) is $0.10. Green Market expenses capital purchases over a three-year period. Given the cost and capacity data below, calculate the “productivity” (i.e., the cubic feet of freezer space per dollar) for each freezer alternative. Which freezer brand would you recommend to Nicholas?

ALASKAN SEAL

BRR FROST

COLD CASE

DEEP FREEZE

Purchase cost

$3270

$4000

$4452

$5450

Daily energy consumption (kwh)

3.61

3.88

6.68

29.07

Volume (cu ft)

25

35

49

72

Im so confused... i know productivity is cubic feet/total cost but i have no idea how to do this

Answer 1

THANK YOU so much

Answer 2

For freezer A, we have

cost = 3270
energy = 3.61 kwh
energy cost = $0.10/kwh
volume = 25 ft^3
energy in 3 years = 3.61 kwh/day * 3*365 days = 3953 kwh = $395.30
So, the cost over 3 years is 3270+395.30 = $3665.30
So the productivity is 25ft^3/3665.30$ = 0.00682 ft^3/$

Now do the others, and pick the best unit.

Answer 3

To calculate the productivity for each freezer alternative, you need to divide the volume (in cubic feet) by the total cost, including the purchase cost and the operating cost over the three-year period.

First, let's calculate the total operating cost for each freezer alternative. To do this, multiply the daily energy consumption (kwh) by the cost of energy per kwh ($0.10) and then multiply it by 365 (days in a year) and finally by 3 (years).

ALASKAN SEAL:
Total operating cost = 3.61 (kwh/day) * $0.10/kwh * 365 days * 3 years

BRR FROST:
Total operating cost = 3.88 (kwh/day) * $0.10/kwh * 365 days * 3 years

COLD CASE:
Total operating cost = 6.68 (kwh/day) * $0.10/kwh * 365 days * 3 years

DEEP FREEZE:
Total operating cost = 29.07 (kwh/day) * $0.10/kwh * 365 days * 3 years

Now, add the purchase cost to the total operating cost to get the total cost for each freezer alternative:

ALASKAN SEAL:
Total cost = Purchase cost + Total operating cost

BRR FROST:
Total cost = Purchase cost + Total operating cost

COLD CASE:
Total cost = Purchase cost + Total operating cost

DEEP FREEZE:
Total cost = Purchase cost + Total operating cost

Finally, calculate the productivity by dividing the volume (in cubic feet) by the total cost for each freezer alternative:

Productivity (ALASKAN SEAL) = Volume / Total cost

Productivity (BRR FROST) = Volume / Total cost

Productivity (COLD CASE) = Volume / Total cost

Productivity (DEEP FREEZE) = Volume / Total cost

Compare the productivity values for each freezer alternative, and recommend the brand with the highest productivity value to Nicholas.

Answer 4

To calculate the productivity for each freezer alternative, you need to divide the volume (in cubic feet) of each freezer by its total cost. The total cost includes both the purchase cost and the operating cost (energy consumption) over a three-year period.

Here's how you can calculate the productivity for each freezer alternative:

1. Calculate the operating cost for each freezer:
- Multiply the daily energy consumption (kWh) by the cost of energy per kilowatt-hour ($0.10).
- Multiply the result by 365 (number of days in a year) to get the annual energy consumption in kWh.
- Multiply the annual energy consumption by 3 (since the capital expenses are spread over a three-year period) to get the total energy consumption in kWh over three years.
- Multiply the total energy consumption by the cost of energy per kilowatt-hour ($0.10) to get the total operating cost for each freezer over three years.

2. Calculate the total cost for each freezer:
- Add the purchase cost and the total operating cost for each freezer alternative.

3. Calculate the productivity for each freezer:
- Divide the volume (in cubic feet) of each freezer by its total cost.

Let's go through an example for the Alaskan Seal freezer brand:

1. Calculate the operating cost for Alaskan Seal:
- Daily energy consumption: 3.61 kWh
- Annual energy consumption: 3.61 kWh * 365 days = 1316.65 kWh
- Total energy consumption over three years: 1316.65 kWh * 3 = 3949.95 kWh
- Total operating cost over three years: 3949.95 kWh * $0.10/kWh = $394.99

2. Calculate the total cost for Alaskan Seal:
- Purchase cost: $3270
- Total operating cost: $394.99
- Total cost: $3270 + $394.99 = $3664.99

3. Calculate the productivity for Alaskan Seal:
- Volume: 25 cu ft
- Productivity: 25 cu ft / $3664.99 = 0.00682 cu ft/$

Repeat the above steps for the other freezer alternatives (BRR Frost, Cold Case, and Deep Freeze) and compare their productivities. The freezer brand with the highest productivity (i.e., the highest cubic feet of freezer space per dollar) would be the recommended choice for Nicholas.