Equipment Budget Justification

Due March 7th

Last Name: Mittongtare First Name: Akarin

1. List the 2 fryers you have selected to compare (1 pt):

Gas Fryer Royal Range REEF-35
Make &
Model #

Electric Fryer Hobart HF50

Make &
Model #

2. Discuss the initial purchase costs of each fryer (all 6) vs. lifetime costs (9 pts):
Actual $ amount of equipment initial purchase comparison (2):
The initial cost of our selected gas fryer, the Royal Range REEF-35, comes out to be $6917
which is significantly less than the Energy Star Gas Fryer which comes out to be $8967 at initial
cost. However, the initial cost of the Royal Range REEF-35 does not differ greatly from the Base
Efficiency Gas Fryer, which has an initial cost of $6679. In comparison to our selected electric
fryer, the Hobart HF50 which has an initial cost of $6750, the Royal Range REEF-35 does not
differ that much. However, the Base Efficiency Electric Fryer and Energy Star Electric Fryer cost
have a lower initial cost than that of the gas fryers at $5225 and $7842 respectively.

Energy cost / gas vs. electric comparison (2):

When reviewing the energy costs between gas and electric fryers, gas fryers are much more
inexpensive than the electric fryers in this aspect. Our gas fryer, the Royalty Range REEF-35, has
an annual energy cost of $789 with the base Efficiency Gas Fryer and Energy Star Efficiency
Fryer costing $1339 and $706 in annual energy costs respectively. These are much more
inexpensive than the electric fryers, with the Hobart HF50 costing $2385 in annual energy costs
and the base efficiency electric fryer and energy star efficiency electric fryer costing $3063
and $2558 respectively.

Maintenance cost comparison (1):

The annual maintenance costs of the electric fryers and gas fryers do not differ significantly.
Maintenance of the 3 gas fryers costs $120 annually while maintenance costs of the 3 electric
fryers comes out to $125 annually.

Total lifetime cost comparison (2):

When comparing the lifetime costs, gas fryers are significantly more inexpensive than the
electric fryers they are being compared to. The Royal Range REEF-35 has a total lifetime cost
of $17825 which is much more inexpensive than the Hobart HF50 which has a total lifetime
cost that is almost twice as much; $36870. This also applies to the total lifetime costs of the
base efficiency fryers and energy star fryers. The gas base efficiency fryer has a total lifetime
cost of $24187 while the electric base efficiency fryer has a total lifetime cost of $43481 which
is significantly higher. The energy star gas fryer is very inexpensive in comparison to the energy
star electric fryer at a total lifetime cost of $18879 and $40038 respectively.

Overall cost comparison (2):

When comparing the costs of electric fryers and gas fryers, gas fryers are shown to be
significantly more inexpensive than the electric fryers. Although initial costs of the fryers are
relatively similar, the energy costs subjected by gas fryers is much less than that of electric
 fryers. In the lifetime of the fryers, the difference in energy costs makes a significant difference,
making gas fryers much more inexpensive than electric fryers in the long run. Whether or not
the low cost energy in gas fryers is more efficient will be determined later.

3. Discuss each fryers performance in terms of efficiency and production capacity (2 pts):
Efficiency (%) comparison (1):
The gas fryer we have chosen, the Royal Range REEF-35 has a heavy-load energy efficiency
of 54% which is not so far off from the energy star gas fryer which has an efficiency of 57%.
Understandably, these are both more efficient than the base efficiency gas fryer at 35%.
However, if we review the heavy-load efficiency of the electric fryers, we can see that they
are already much more efficient than the gas fryers. The Hobart HF50 has a heavy-load
energy efficiency of 85%, which is equal to that of the energy star electric fryer and only 10%
greater than the base efficiency electric fryer which is at 75%. Although electric fryers do cost
more than gas fryers annually,

Production Capacity (lb) comparison (1):

Our gas fryer, the Royalty Range REEF-35 has a production capacity of 60lbs/hr which is equal
to that of the base efficiency gas fryer. The energy star gas fryer outdoes these two slightly by
producing 67lbs/hr at a lower energy cost. The electric fryers have an even larger production
capacity with the Hobart HF-50 having a production capacity of 72lbs/hr, almost equal to that
of the energy star electric fryer at 71lbs/hr. Both of these electric fryers have a greater
production capacity than the base efficiency electric fryer, which fries at 65lbs/hr.

4. Compare all 6 fryers overall and state your top choice (1 pt).
Overall comparison:
TOP CHOICE: Hobart HF50

Looking at $ costs only, gas fryers are much more inexpensive as far as total lifetime costs for
energy. All three gas fryers have total lifetime costs that are lower than $25000 and the Royal
Range REEF-35 is the most inexpensive of all the fryers we are comparing today at $17825.
However, the electric fryers are so much more efficient than the gas fryers that, when
producing large batches of fries, proves to be much better for the company. Although the
Hobart HF50 has a total lifetime cost of $36870, it has a heavy-load energy efficiency of 85%
and a production capacity of 72lbs/hr which is greater than or equal to the base efficiency
and energy star efficiency electric fryers. So although the Hobart HF50 has a greater lifetime
cost than the Royalty Range REEF-35, it has much greater efficiency and production value
making it our top choice.

5. Complete the chart below. Discuss the production capacity of your selected fryer. Is it
adequate for your needs? Explain in the box below. (1 pt)
Your Fryers Load Size Your fryers cook time to cook Your Fryers Production
(lb potatoes) one load of potatoes (min.) Capacity (lb/hour)
3lbs 2.33min 72lbs/hr

Service requires 200 servings for an hour at lunch. Each serving is 4oz, which totals 50lbs for 200
servings. Since we only need 50lbs/hr and our fryer produces 72lbs/hr, the Hobart HF50 is more
than adequate for our needs.
6. Make or Buy decision (4 pts).
Fresh $1.00 Frozen $0.54
Cost per serving: Cost per serving:
Will you make or buy your French fries?
I will be buying frozen French fries because much of the annual budget will be going into
energy costs of the electric fryer. Frozen fries cost a little more than half that of fresh fries and
thus it would be more cost-effective for us to use frozen fries with the remaining budget from
the purchase of the new fryer.

7. Provide a justification/proposal for your boss to include at least the following (6 pts):
a. Reason you need a new fryer
b. Which fryer you propose to purchase
c. Include the initial cost and lifetime cost ($)
d. Your reasons for recommending it

The current facilities fryer is 12 years old and has not been able to perform well as of
late in order to meet customer needs. It has reached the point where the outdated
fryer needs to be replaced with a new and more efficient one, in order to meet the
desires of customers for French fries. With the new fryer, we will be able to meet
customer demands once again in a cost-effective way. The fryer I am recommending
for purchase is the Hobart HF50 electric fryer. Six different fryers were in compared in
the search for a new fryer: 3of them being electric and 3 of them being gas. The initial
cost of our purchase wont be the most expensive or most inexpensive, but rather it
finds itself in between at $6750. In comparison, the base efficiency electric fryer and
energy star electric fryer stand at the initial costs of $5225 and $7842 respectively. The
gas fryers have a more expensive initial cost with the Royal Range REEF-35 fryer starting
at $6917 and the base efficiency gas fryer and energy star gas fryer costing $6679 and
$8967 initially. Although not the cheapest initially, the Hobart HF50 stands at a good
price in comparison to the other fryers. Lifetime cost is where the electric and gas fryers
really begin to differ. Energy for electric fryers are expensive and thus the Hobart HF50
comes out to $36870 in total lifetime costs, which is much lower than the base
efficiency electric fryer and energy star electric fryer which have total lifetime costs of
$43481 and $40038 respectively. In comparison, the gas fryers cost much less in total
lifetime costs. The Royal Range-35 has a total lifetime cost of $17825 while the base
efficiency gas fryer and energy star gas fryer come out to $24187 and $18879
respectively. Although the total lifetime costs of the gas fryers are much less than that
of the electric fryers, we are looking to purchase on the Hobart HF50 because of how
efficient it is. It is important to look at performance as well as price and the heavy-load
efficiency of the Hobart HF50 is 85% compared to the gas fryers which fashion around
50% heavy-load efficiency. Also, the Hobart HF50 has a much greater production
capacity at 72lbs/hr while the gas fryers average around 60lbs/hr revealing that the
electric fryer has much greater production and more efficiently. Thus, although the gas
fryers prove to be more inexpensive in lifetime costs in order to maintain it, the Hobart
HF50 produces much more at a more efficient rate which will definitely save time and
money in the long run. The Hobart HF50 should be purchased in order to provide
efficiently provide customers with the product they desire.
 RUBRIC
Equipment Capital Budget Justification

Grade Item Points

1. Name the brand & model of the 2 fryers selected on Fishnick 1

2. Initial purchase cost vs. lifetime cost: 9

Actual $ amount of equipment purchase (2 pt)
Energy cost / gas vs. electric (2 pt)
Maintenance cost (1 pt)
Total lifetime cost (2 pt)
Overall cost comparison (2 pt)
3. Performance 2
Efficiency (%) (1 pts)
Production capacity (lbs) (1 pts)
4. Overall comparison & selection 1

5. Production capacity (lbs) of selected fryer adequate? (1 1

pt)

6. Make or Buy decision 4

7. Summary Recommendation: 6
Reason for needing a new fryer (1 pt)
State which selected (1 pt)
Must list cost and lifetime cost in $ amounts (1 pt)
Reason for recommending it (3 pt)
o Gas vs. electric
o Why is it the best choice?
o Was it justified?
Organization and format
Proper format (-2)
Grammar, Spelling, etc. (-2 pt)
Printed comparisons attached (2 pts each) 6
3 Gas fryers
3 Electric fryers
Make or Buy comparison
TOTAL: 30