Annual Running Cost as Dominant Feature for Industrial Machines Available Annual Running Cost Budget Allocation

Abstract

The annual running cost of a machine, which includes expenses like depreciation, repairs, maintenance, fuel, and operator wages, significantly impacts profitability, operational efficiency, and decision-making. Increased running costs can reduce profits, strain budgets, and potentially lead to decreased equipment utilization. Conversely, managing and reducing these costs can improve efficiency and competitiveness. This study found annual running cost as strong decision strategy for machine vendors’ selection pre procurement. A low purchase cost and good engineering factors machine may pay heavily for these when running the machine. Hence the need for its consideration after vendor might have passed both the machine low cost and the engineering features requirements. In other to proffers solutions to this, this study identified the attributes to this strategic decision, modeled it (mathematics logics and is algorithm development) and developed a software decision tool using python programming language for its application. Three machines were used as case studies in selected Cocoa processing Industry                (Winnowing Machine (W/M), Cocoa Milling Machine (M/M) and Cocoa Liquor press(L/P) for extracting butter from the liquor . Concerning Winnowing Machine (W/M), the line with diamond shape points, was observed that the machine annual operating cost kept increasing gradually as the machine kept aging. This was as a result of frequent increase in repair and maintenance cost. The increase was pronounced well after the third year of purchase (2010) And in most cases the machine was over flogged. The Milling machine with square points  shaped (M/M) was found  sharp MAOC value It was observed the machine has a long time down time in 2013 due to costly damaged of critical component , the same issue was about to occur in 2015 but the experienced of 2013 helped to rectify the problem at infancy. The liquor press with pyramid shape points  (L/P) really performed excellently well but dropped little at year 2015 , here it was observed that the machine was underutilized the cocoa crushing rate for the year was less compared with  the initial targets of the company. Using the  running cost fund available  (N12,370,000:000) budgeted  for the three  factory machines, that of the winnowing  machine (WM)  was N4,557,815.874 which is the highest,  followed by that of Milling Machine (MM) N 3,927,734.660 and that of the liquor press (LP)  was N3,901,550.731 the list,  based on available financial running cost capability of the company of  Twelve Million ,three hundred and seventy ( N12,370,000) Naira only. This model will be found usable in allocating available running cost allocation to several machine in small, medium and large-scale industries.