Sample Report

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To: Plant Manager From: Plant Engineer Re: Selection of New Forklift Date: 7/10/2012 Here is the report you requested concerning the recommendation of a replacement for the current forklift which can no longer be repaired. Information was obtained from two leading manufacturers of forklifts. I recommend the plant purchase a gasoline powered forklift as it best meets the firm’s cost budgeting requirements and standards of performance. Cost Our analysis of cost differences shows that the gasoline powered forklift is the least expensive option. As can be determined from the difference in total costs shown at the bottom of Table 1, the gasoline powered forklift costs $6770 less than the electric powered forklift. Table 1: Cost Comparison Electric Forklift | Gasoline Forklift | A. Initial Cost | A. Initial Cost | * new ramp $600 | * widening of door $800 | * new electric forklift $7,250 | * new gasoline forklift $9,000 | * special battery $1,500 | * new exhaust fan $780 | * stop production $24,000 | * stop production $16,000 | Total initial cost $33,350 | Total initial cost $26,580 | | | B. Annual Cost | B. Annual Cost | * electricity $2,000 | * fuel $2,200 | * repair/maintenance $800 | * repair/maintenance $600 | Total annual cost

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