Solutions to Applesoft Case Work Solutions and Hints to the Applesoft Worksheets

Solutions to Applesoft Case Work

Solutions and Hints to the Applesoft Worksheets



Solution to Worksheet 10A: Developing a Process Flow Diagram



Solution to Worksheet 10B: Developing an Eco-map of Water


Solution to Worksheet 10B: Developing an Eco-map of Solid waste



Solution to Worksheet 10C: Developing the Material Balance for Apples




Solution to Worksheet 10C: Developing the Material Balance for Water



Pro

du

ctiv

ity

is lo

w (

abou

t 72

%)

Nozzles are inefficient

Maintenance of nozzlesis inadequate

Poor Housekeeping (leakages)

Skills on apple sorting and grading to be upgraded

Handling practicesneed improvement

Machines

ManagementMethods

Peeling m/c to be improved.Blancher could be replaced

Materials

Staff needs Training on env. Impacts of operationsProcesses

exceed best practice norms

Excess juice fromBlancher is considered as waste

Cores and Peelsare disposed as wastes

Fishbone Diagram

Solution to Worksheet 10D: Conducting Cause Diagnosis for Low Productivity


Solution to Worksheet 10E: Identifying and Screening Cleaner Production Options


The options at the low or no cost end could include training of workers to do away with sloppy handling, improving the maintenance of spray nozzles, sending the organic waste as animal feed to the farmers..

Low to medium cost options could include replacing the spray nozzles with flat nozzles; exploring reuse of water used to clean apples for floor washing, operating the blancher by practice of holding to minimize steam requirements, using hot air from the blancher for the purpose of drying, etc.

Medium to high investment options could include the recovery of sugar supplement from waste, improving the peeling machine with spring loaded knives, and replacing the original blancher with one having a higher product to steam ratio.


All the solid wastes generated at the plant i.e., fruit peels, cores, spoilt / damaged fruit and the packaging are presently dumped together along with the plastic, packaging wastes and broken crates. Instead of co-disposing the organic waste with the inorganic packaging waste, the company could sell the organic waste as cattle feed to the farmers.

Cost and benefit calculations

Income from the sale of organic waste = (400 + 720) kg / day x 300 days x US$ 5 / 1000 = US$1,680

Savings due to reduced disposal of waste = (400 + 720) kg / day x 300 x US$ 10 / 1000 = US$3,360

Total savings = US$ 5,040 /year

Option 1 : Sale of organic waste as cattle feed


The environmental benefit of Option 1 will be reduced nuisance to the neighborhood community and utilization of wastes.



Option 2: Replacement of shower type nozzles with flat nozzles

The spray nozzles that are presently being used are shower-style and thus, very water-intensive. By replacing them with flat nozzles, water will be conserved. This improvement will also eliminate the manual washing practice (i.e. saving on time). Costs however will be incurred in replacing the 25 shower style nozzles (15 on the conveyor-washing system and 10 for cooling the blanched apples) with flat nozzles.

Cost and Benefit Calculations

Cost of flat nozzles = US$30 / nozzleReplacement of all 25 nozzles = US$ 750Maintenance costs = US$ 250 / yearVolume of water saved by the new nozzles = 40% x (40 + 10) m3 / day + 12.5 m3 / day = 32.5 m3 saved / day = 9,750 m3 / year


Savings on water conservation = 9,750 m3 x US$ 0.2 / m3 x 1.2 (i.e. 20% anticipated increase in water rate) / year

= US$ 2,340 / year

The wastewater volume will be reduced by 32.5 m3/day (i.e. the same as the volume of water saved) = 9,750 m3/year

Savings on wastewater treatment = 9,750 m3 / year x US$ 0.15 / m3

= US$ 1,462.50 / yearTotal costs incurred in conserving water = Capital costs US$ 750 and annual costs of US$ 250 / year.

= US$ (2,340 + 1,462.50) – US$Total annual savings = US$ 3,802.50/ year

The payback on Option 2 is about 2.5 months and can be implemented immediately since it requires only a small capital investment.


Option 2: Replacement of shower type nozzles with flat nozzles



Based on the brochure, the maximum peel loss will be 100 kg /ton. Hence, production will increase as follows:

4000 kg – 400 kg ( spoilt and damaged apples) = 3600 kg / dayPresent loss of raw material in peels and core fleshings = 200 /1000 x 3600 = 720 kgNet salable production = 3600 kg – 720 kg = 2880 kg /day

After upgrading the peeling equipment:

Loss of raw material in peels and fleshings = 100/1000 x 3600 = 360 kgNet salable production = 3600kg – 360 kg = 3,240 kg / day

The productivity will thus be close to 78%; closer to the target of 80% set by the company.Incremental production = 360 kg / day = 36 boxes /dayIncremental earnings = 36 x 8 x 300 = US$ 86,400 / year Cost of upgrading the peeling machine = US$ 80,000

Payback period for Option 4 will be about 11 months.

Option 3: Use of high-grade spring mounted knives for apple peeling


Solution to Worksheet 11: Preparing a Proposal for Demonstration Project and For Securing Financial Assistance


Option 4: Recovery of the excess juice from blanching through concentration, for use as a sugar supplement

The excess juice from the blanching process contains sugars and fine apple pieces. The collected juice can be concentrated together with peelings and cores in a crusher-cum-evaporator, and sold as a by-product to the food industry.

Apart from generating revenue due to the recovery of a by-product, the implementation of Option 3 will result in substantial reduction in the BOD of the wastewater, thereby lowering the wastewater treatment costs.

Costs incurred would be for the crusher-cum-evaporator equipment and working time. As there is no present operating data available on this technology option, this project may be considered as a demonstration project.


Cost and Benefit Calculations: For screening the demonstration project, two types of cost-benefit analyses could be done.

Optimistic scenario:


Cost of the crusher-cum-evaporator

= US$ 100,000

The amount of sugar supplement that can be recovered per day

= (15% of 2000 kg from the juice) + 15%(40% of 720 kg from the peelings and cores)

= 344 kg

Revenue generated per day = 344 kg x US$ 0.6 / kg = US$ 206.8 / day = US$ 61,920 / year

15% of the capital of the crusher-cum-evaporator is the operational cost

= US$15,000

Net revenue generated per year = US$ 61,920 – US$ 15,000 = US$ 46,920

The payback period will be nearly 26 months.


Pessimistic scenario:


= US$ 120,000

The amount of sugar supplement that can be recovered per day

= (10% of 2000 kg from the juice) + 10%(40% of 720 kg from the peelings and cores)

= 228.8 kg

Revenue generated per day = 228.8 kg x 0.5 = US$ 114.4 / day = US$ 34,320 / year

15% of the capital of the crusher-cum-evaporator is the operational cost

= US$18,000

Net revenue generated per year = US$34,320 – US$18,000 = US$ 16,320

The payback period will be nearly 88 months




Net Present Value (NPV) for optimistic scenario


100,000$

Effective life of the crusher-cum-evaporator

10 years

Depreciation 10%

Net Annual Savings =Revenue generated – (depreciation cost +operating cost)

= 61920 – (10,000 +15,000) = 36920$

NPV = -CFo+ CF1 + CF2 +…. CF10

(1+i)1 (1+i)2

(1+i)10

= -100,000 +36920 +…+36920 (1+8)1

(1+8)10

= 6496.33$




120,000$


10 years

Depreciation 10%


= 34320 – (10,000 +18,000) = 6320$

NPV for optimistic scenario = -CFo+ CF1 + CF2 +…. CF10

(1+i)1 (1+i)2

(1+i)10

= -120,000 +6320 +…+6320 (1+8)1

(1+8)10

= 12543.33$

Net Present Value (NPV) for pessimistic scenario



Internal Rate of Return (IRR) for optimistic scenario

Cost of the crusher-cum-evaporator 100,000$


10 years

Depreciation 10%


= 61920 – (10,000 +15,000) = 36920$

IRR (solving for i) 0 = - CFo + CF1 + CF2 +…. CF10

(1+i)1 (1+i)2

(1+i)10

0 = -100,000 + 36920 +…+36920 (1+8)1

(1+8)10

= 58%



Internal Rate of Return (IRR) for pessimistic scenario


120,000$


10 years

Depreciation 10%


= 34320 – (10,000 +18,000) = 6320$

IRR solving for i = -CFo+ CF1 + CF2 +…. CF10

(1+i)1 (1+i)2

(1+i)10

= -120,000 +6320 +…+6320 (1+8)1

(1+8)10

= -12%



Profitability Index (PI):

Profitability Index is the ratio of present value of future cash inflows by present value of cash outlays

General Formula: PI = (PV of cash inflows) (PV of cash outflows)

If PV <1 The project should be rejected

If PV >1 The project should be accepted

Calculations: 10

PV of cash inflows = 61920 ∑ 1 = 7740 t=1 (1+0.08)

10

PV of cash inflows = 15000 ∑ 1 = 1875 t=1 (1+0.08)



Profitability Index (PI):

PI = 7740 1875

PI = 4.128

PI is more then one therefore the project can be accepted.



No.

Option title Savings made(US $/year)

Payback period(months)

1 Sale of organic waste as cattle feed 5,040 -

2 Replacement of shower type nozzles with flat nozzles - recommended for internal finance

3,802.5 2.5

3 Recovery of the excess juice from blanching through concentration, for use as a sugar supplement - recommended for demonstration projectOptimistic scenarioPessimistic scenario

46,92016,320

2688

4 Use of high-grade spring mounted knives for apple peeling - recommended for external finance

86,400 11

Documents

Solutions to Applesoft Case Work Solutions and Hints to the Applesoft Worksheets