Reference no: EM134007728

Problem

Diesel Vs. Battery You are managing the logistic operations of several warehouses at a national E-commerce business and are tasked with evaluating the decision to buy several new 5ton forklifts. You have two options - one is to buy a conventional diesel-powered forklift and second is a battery-operated forklift. A diesel equipment's initial purchase price is $25,000, while an electric forklift cost $25,000 for the equipment and another $25,000 for the 40kWh battery bank and a high-speed charger. Both options have a 5-year useful life, however their maintenance costs differ. A conventional equipment needs 1 gallon of diesel per hour and a helper to spend about 15 minutes per day to refill the tank, while an electric equipment needs one full cycle of battery charging (that can be done during break times with no attendant) for an 8-hour shift. Assume the warehouses run two shifts/day, 6 days a week. Breakdown maintenance cost for a conventional equipment is $200/month while that of electric equipment is $100/month. Which one will you buy and why? Get the instant assignment help. Calculate Total Cost of Ownership in both cases and show your work. Make current market assumptions wherever needed.