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Advantages and disadvantages of each alternative from deterministic analysis.
Member rating: No Rating | Words: | Submitted: Fri Jan 28 2005
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Advantages and disadvantages of each alternative from deterministic analysis. Alternative 1.(replacement is done by acquiring 8 new machines) Advantages: By acquiring 8 new machines, the center gets extra funds of $50000 annually from the NKF headquarter. With the increased efficiency of the new machines, this option will allow the center to meet the demand of accepting more patients. By accepting this option, the replaced 8 machines will still have a remaining lifetime of 5 years at the end of year 10; hence only 12 dialysis machines need to be considered for future replacement at the end of year 10. Disadvantages: The main disadvantage of this option is the need for a large amount of loan from the bank. With bank interest being compounded at 7% annually, a total interest of $57000 is paid to the bank for this five year loan. This sum of money can be put aside for other better uses...
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