MODEL DEVELOPED FOR COMPETING ACCESSORY, SPARE PARTS AND MISCELLANEOUS COSTS FOR LIMITED AVAILABLE BUDGET UNDER MACHINE AVAILABILITY

Prof Vincent Aizebeoje Balogun and Akinnuli, B. O., Ojo, O. O.   (Published 2016)

Prof Aizebeoje Balogun
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Abstract

Abstract

In a developing company or industry where there is availability of machines to keep the industry running effectively, a need always arise to consider the accessories and the spare parts which will enhance the production planning and also affects the economic growth of the company positively. An optimum model is developed to control the limited available budget that will be optimally allotted to accessories, spare parts and miscellaneous costs. This study considered the strategic decisions for budgeting, developed mathematical models for accessories, spare parts and miscellaneous, with considering the machines cost since it is available for the year under consideration. The models were tested and their performance evaluations carried out. A decision maker/project manager optimally allotted the limited resources to the considered strategic decisions to know exactly the amount that will be required to keep the machines functioning efficiently and effectively so that revenue can be generated. In allotting the limited resources for procurement, this study considered three major strategic decisions: accessories, spare parts and miscellaneous costs. Model for each strategic decision was developed. This study made it known that the highest value in any of these strategic decisions will definitely have the highest inventory in company’s stock for production. Information from the past procurement made by OLAM Cocoa Processing Industry (OCPI), Akure, Ondo State, Nigeria was used as case study to test the developed models for decisions making. Fifteen (15) years past record of equipment cost data was collected from this institute. A software was also developed for easy processing of this data using visual basic language because of its versatility and friendliness. Five million, five hundred thousand Naira (?5,500,000) which is equivalent to more than Twenty – two thousand US dollar (US $22,448.98) was made available for the procurement of accessories, spare parts and miscellaneous costs and the amount allotted are ?2,190,826.18; ?2,861,556.10; and ?447,617.71 respectively. This model is a strong decision tool for allocating available budget especially during the period of financial scarcity where equipment procurement for production needs must be carried out. This model is highly recommended to any manufacturing company, where equipment procurement affects their production in developed and developing countries.

 

 


Item Type: Journal article(non-copyrighted)
Format: PDF document,   172.37 KB
Copyright: Creative Commons LicenseCreative Commons license
Keywords: Model developed; accessories cost; spare parts cost; available budget; machine availability.
Department: Mechanical Engineering
Field of Study: Engineering- Mechanical
Uploaded By: Uddin Osemengbe Oyaimare
Date Added: 31 Oct 2017 12:27pm
Last Modified: 22 Nov 2017
Journal URL: https://www.edouniversity.edu.ng/oer/journal/model_developed_for_competing_accessory_spare_parts_and_miscellaneous_costs_for_limited_available_budget_under_machine_availability


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