SCM Case Study: IISCM – 037 | Total Cost of Ownership

Ju Han Group of Companies decided to open a new workspace at the top floor of their existing building. Planned floor space – 1500 Sq. Ft. Ju Han’s facility management team came out with a conclusion that Blue Star AC (IC318MATU) is the best. It’s your responsibility to calculate the following values.

Purchase Price of Air Conditioners
Total Cost of Acquisition of Air Conditioners
Total Cost of Ownership of Air Conditioners

It is decided that 10 Air Conditioners (1.5 ton) are required. The cost of AC is Rs. 40,000/Unit and the delivery will be taken care by the company. The Outdoor Unit is placed at the roof of the building for safety purposes which can be clamped using the supports which costs Rs. 1000 / Pair that withstand up to 20 Kgs. Above 20 Kgs it would cost Rs. 1500 / Pair. 10 Windows need to be closed with curtains which costs Rs. 675 each. Air curtain of Rs. 15,000 need to be installed at both the entrances acting as a barrier for conditioned air. Since, it is a 5 Star AC the electricity consumption charges will be less and consume only 100 Units every month (costing – Rs. 1835). At the end of 7 Years, the salvage value of this AC will be Rs. 12000. Humidity meter of Rs. 455 is placed at both the entrances to monitor the condition of the room. The vertical tube of 7.5 Meters is required for 6 Nos. and 8.5 Meters for 4 Nos. The tube costs Rs. 235 / Meter. Gas filling is free of cost only for the first time. It is required to refill the gas every three months due to high usage which costs Rs. 2000. Remotes are kept at places and the batteries are changed once in three months. It costs about Rs. 20 / two pieces. Monthly maintenance is needed which costs Rs. 400 and the installation cost would be Rs. 650 including labour charges. Un-installing will again costs Rs. 650. The capacitor will be costing Rs. 400 and due to place constraint for Outdoor Unit, the air circulation won’t be good, and the capacitor need to be changed every two months for 4 units. Compressor need to be changed every 4 Years due to continuous running. Compressor would cost around Rs. 4000. Since it’s in the top floor, the dust will be in higher rate and the air filters need to be changed once in two months. Cost of air filter is Rs. 300. Due to over crowd, the team decided to install new fans costing Rs. 2500 near all the Indoor Units.