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This economic analysis team project evaluates whether to repair or replace old computers at California State Polytechnic University. The analysis compares the costs, productivity, and maintenance of the existing computers with two potential replacement options. The HP computers are deemed the best option due to their higher productivity, despite their higher initial cost.
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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