Talk:Material handling

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Proposed Major Change to Article[edit]

I have created an expanded version of this article (see https://en.wikipedia.org/wiki/User:Mgkay/Material_handling) and would like to propose it as the new base article for the topic, from which others can expand it. I am an academic and have taught and done research in material handling for many years. I have tried to make it concise and comprehensive and have included citations for everything in the article. Please let me know your comments regarding the change. Michael G. Kay 19:01, 21 September 2015 (UTC) — Preceding unsigned comment added by Mgkay (talk • contribs)

OR equation[edit]

I made the addition in bold below, but my actual feeling is that this is all too OR to remain here.

A rough guide to determine how much can be spent for automated equipment that would replace one material handler is to consider that, with benefits, the median moving machine operator costs a company $45,432 per year.^[1] Assuming a real interest rate of 1.7%^[2] and a service life of 5 years^[3] with no adoption/adaptation cost, no learning cost, no training cost, and no operating cost for equipment with no salvage value,^[4] a company should be willing to pay up to
$\$45\,432\left({\frac {1-1.017^{-5}}{0.017}}\right)=\$45\,432(4.75)=\$219\,019$
to purchase automated equipment to replace one worker.^[5]

References

^ $31,530 median wage divided by 0.694, where wages represent 69.4% and benefits 30.6% of total labor cost ("Employer Costs for Employee Compensation". BLS. December 2014. Retrieved 2015-05-15.).
^ Average U.S. rate from 2005-2009 ("Real interest rate". The World Bank. Retrieved 2015-05-15.).
^ Average service life of Custom Software ("BEA Depreciation Estimates" (PDF). BEA. 2004. Retrieved 2015-05-15.), conservative assumption since software is a major component of automated equipment and has the shortest service life compared to other components.
^ Conservative assumption that simplifies the analysis since any positive salvage value would increase the purchase cost estimate.
^ Amount willing to pay is the present value of an annuity immediate.

All the equation illustrates is a technical handling of an interest rate discount over five years, plus a bunch of numbers "conservatively" plucked.

But I incline to more over less, so I'll leave it for the next editor to decide. — MaxEnt 01:19, 5 January 2022 (UTC)[reply]

[1] $31,530 median wage divided by 0.694, where wages represent 69.4% and benefits 30.6% of total labor cost ("Employer Costs for Employee Compensation". BLS. December 2014. Retrieved 2015-05-15.).

[2] Average U.S. rate from 2005-2009 ("Real interest rate". The World Bank. Retrieved 2015-05-15.).

[3] Average service life of Custom Software ("BEA Depreciation Estimates" (PDF). BEA. 2004. Retrieved 2015-05-15.), conservative assumption since software is a major component of automated equipment and has the shortest service life compared to other components.

[4] Conservative assumption that simplifies the analysis since any positive salvage value would increase the purchase cost estimate.

[5] Amount willing to pay is the present value of an annuity immediate.

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