\ MATERIALS HANDLING ON THE FARMSTEAD AN ANALYTICAL APPROACH Thesis for that Degree of M. 5. MICHIGAN STATE UNIVERSITY Carl Axel Ronnfelt 1958 “-4qu (1.1 1' ‘ I ‘ Hgv'lm.’rr:mr buy * HT": MATERIALS HANDLING ON THE FARMSTEAD AN ANALYTICAL APPROACH by CARL AXEL RONNFELT AN'ABSTRACT Submitted to the Michigan State University of Agriculture and Applied Science in partial fulfillment of the requirement for the degree of MASTER OF SCIENCE Department of Agricultural Engineering Year 1958 7y. :4 mflé ABSTRACT Materials handling on the farmstead is becoming of increased relative importance because of the larger specialized units in today's farming and due to the com- paratively high mechanization in other phases of farm work. In industry, materials handling studies organized in the field of industrial or management engineering have been carried on for a long time. The handling problems on the farmstead being somewhat different from those in industry. can not to any great extent be solved 'with techniques now used in industry; flow diagrams and flow process charts are examples of industrial techniques that could be used. Industrial materials handling analysis is worked mainly as a traffic problem, main factors in the analysis being: 1. Unit loads of packaged or baled material 2. Speed of travel 3. Distances traveled 4. Scheduling and routing for handling equipment 5. Distribution of storages with respect to the locations where material is used iii Main interest in farmstead materials handling can be concentrated around the following possibilities: 1. Changing materials characteristics e.g. fluidize 2. Eliminate handling through self-feeding or other arrangements in the layout 3. Equipment that is designed not only for transport but also for transfer of material, facilitating mechanization or automation of complete systems. With the interest centered around the three factors material, layout and equipment. it is still difficult to determine the influence of each one of these factors on the materials handling. weight, volume, distance, etc. which are used as units in industry give generally no good over-all measure for a materials handling problem. Time in man-hours and cost are the only meaningful measurements to determine the influence of the different factors in the solution of a.materials handling problem. I The main requirement for a cost comparison are good time standards for methods where man labor is involved. Such standards are not available as yet, and iv development of such data is an urgent need for careful selection of methods. Standard data should be developed from.methods studies and improvements and not represent averages from a number of farms. \ Once in possession of time standards the rest of the cost computations are comparatively simple. Selection of appropriate interest rate and service life for equipment and buildings is important for a good - result. The interest rate has to be determined with respect to return on money in alternative uses. Service life estimates must consider wear and deterioration as well as obsolescence. Limitations in service life due to wear can be predicted from.wear tests within reason- able limits. Data sheets are developed that can be used for the computational procedure. Obsolescence usually being more difficult to predict. is of great importance for structures and some equipment with a long physical life. Considerations should be given to the cost of inferiority in a present system when other alternatives are accepted or rejected. A continuous followbup on methods development would give information for better predictions of present and future inferiority, and facilitate appropriate replacements. Acceptance of new techniques at appropriate time is going to be a most important decision for a prosperous agriculture in the future. Money being scarce, the allocation of resources between alternatives is important. Return on money in other alternative uses in mechanization on the farm or for other production factors has to be considered. The efficiency due to scale of operation should be considered, and tends to furthermore encourage the development of larger units. MATERIALS HANDLING ON THE FARMSTEAD AN ANALYTICAL APPROACH by CARL AXEL RONNFELT A THESIS Submitted to the Michigan State University of Agriculture and Applied Science in partial fulfillment of the requirement for the degree of MASTER OF SCIENCE Department of Agricultural Engineering Year 1958 ACKNOWLEDGEMENTS The author wishes to express his sincere adknowledgements to: Professor H. P. McColly. as major professor for his timely suggestions and contributions towards com- pletion of this thesis: A Doctor L. H. Brown for inspiring guidance and assistance in my work; Doctors J. S. Boyd and P. H. Buelow for their suggestions and interest in the project: W. K. Kellogg Foundation to which most indebtedness is owed. Without their financial support my studies in the U. S. A. and subsequent.work on this problem would not have been possible. Professor A. W. Farrall. Head of the Department of Agricultural Engineering and Doctor M. L. Esmay, Graduate Student.Advisor. for their administration and helpful guidance of my graduate program: Fellow students in Agricultural Engineering for all their help and advice: Berit. and.Maria for all their encouragement and for their patience during my studies . II. III. IV. TABLE OF CONTENTS INTRODUCTION..... ....................... .. REVIEW OF LITERATURE.......... ........... . MANAGEMENT ENGINEERING IN INDUSTRY ..... ... MATERIALS HANDLING ON THE FARMSTEAD.. ..... FUNCTIONAL ANALYSIS OF MATERIALS HANDLING SYSTEMS .......................... Mathematical Model..... ................... Check Lists and Other Techniques Used in Industry...... ............................ Important Factors in Farm Materials Handling.. ................................ Materials Characteristics .......... . ...... number ............................... Weight ............................... Volume ............................... Weight and Volume ............ . ....... Time Standards... .................... Other Material PrOperties ............ Layout Analysis ........................... Flow Diagram... ...................... Flow Process Chart ................... Page 14 21' 21 23 24 25 27 27 27 28 29 29 30 31 32 ix Page Distance and weight ...... ............. 33 Cross Charts 00............OOOOOOOOOOO 36 Other Factors in the Layout ..... .... 37 Equipment Characteristics .. ................... 37 Power Requirements ...... . ....... ..... 37 Unit Load ............ .......... ...... 39 Degree of Mechanization ...... ........ 40 VI. COST ANALYSIS OF MATERIALS HANDLING SYSTEMS ... 45 Cost Computations ............................. 45 The Nature of Cost ................... 45 Depreciation .... ........ .. ..... ...... 47 Interest ............................. 49 Capital Recovery Factor ... ......... .. 50 Taxes and Insurance .................. 52 Repair and Maintenace ................ 52 Power Cost ........................... 55 Labor Cost . ......... ....... .......... 59 Data Sheets ............... ..... . ..... 61 Equipment Selection Chart ............ 61 Scale of Operation .. ............. .... 65 Marginal Cost Analysis .. ..... ........ 67 Other Methods for Cost Comparison .... 69 Present WOrth Method ................. 69 Page Capitalized Cost. . ................... 69 Return on Investment and Pay off Period ............................... 70 Replacement Theory... ..... . ............... 71 Defender's Adverse Minimum.... ....... 77 Challenger's Adverse Minimum ......... 79 Operating Inferiority Gradient ....... 81 Accuracy of the Short Cut Formula.... 83 VII 0 SUMMARY AND comLUSIONS O O O 0 O O O O O O O O O O O O O O O O 0 O 84 sum‘rYOOOOOOOOOOOOOOOOOOIOOOOOOOOOOOOO ...... 84 conCIusionBOOOOOOOOOOO......OOOOOOOOOOOOOOOO. 85 VIII. RECOMMENDATIONS FOR FURTHER STUDIES ......... 90 AP PENDIX . 0 O O O 00000000 O O O O O O O O O O O O O O OOOOOOOOOO 9 2 REFERENCES 118 Table LIST OF TABLES Page AMOUNTS HANDLED PER COW, TONS PER YEAR.... 15 TOTAL TONNAGE PER YEAR OF AGRICULTURAL PRODUCTS IN THE U. S. A................... 16 TOTAL TONNAGE PRODUCED BY SOME INDUSTRIES IN THE U. S. A................. 17 INDEX OF OUTPUT PER.MAN HOUR IN FARMING ENTERPRISES FOR 1956...... ..... ... 17 TIME IN HOURS PER YEAR FOR HANDLING DIFFERENT MATERIALS FOR A MILK COW, INCLUDING YOUNG STOCK........ ............ . 19 BULK DENSITIES FOR MATERIALS HANDLED ON THE FARMSTEAD 26 POWER REQUIREMENTS FOR DIFFERENT MATERIALS HANDLING EQUIPMENT............... ...... ... 38 ANNUAL REPAIR COSTS IN PER CENT OF FIRST COST FOR MATERIALS HANDLING EQUIPMENT..... 53 AVERAGE ANNUAL MAINTENANCE COST FOR GRAIN STORAGE STRUCTURES........ ..... ..... 54 Figure LIST OF FIGURES Page TIME FOR HANDLING MATERIAL OVER DIFFERENT DISTANCES...................... 35 TIME FOR HANDLING MATERIAL OVER DIFFERENT DISTANCES AND WITH VARYING UNIT LOAD................................ 41 OVERHEAD COST FACTOR FOR SCREW CONVEYOR AT DIFFERENT INTEREST RATES AND EXPECTED YEARS OF LIFE............................ 56 OVERHEAD COST FACTOR FOR STRUCTURAL ASSET AT DIFFERENT INTEREST RATES AND EXPECTED YEARS OF LIFE............................ 57 BREAK-EVEN CHART......................... 63 UNIT COST CURVES......................... 66 COST CURVE FOR DETERMINING ADVERSE MIMMUMOOOOOOOOOO......OOOOOOOOOOOOOOOOOO 74 APPENDIX Appendix Page 1 LABOR REQUIREMENTS, MAN HOURS PER TON, FOR DIFFERENT HANDLING OPERATIONS ON THE FARMSTEAD.................. ......... 1 2 ENERGY REQUIREMENTS FOR WORK ON THE FARM. 96 3 MANUAL HANDLING TIME CHART....... ....... . 99 4 FLOWDIAGRAM..... .......... ..... 100 5 FLOW PROCESS CHART............. .......... 101 6 CLASSIFICATION OF MECHANIZATION AND IMPLEMENTATION LIST FOR HANDLING OPERATIONS..... ........... ....... ...... .. 102 7 DEVIATIONS IN CAPITAL RECOVERY FACTORS COMPUTED IN DIFFERENT WAYS... ............ 107 8 DATA SHEETS........... ..... . ........... .. 108 9 EQUIPMENT SELECTION CHART................ 112 10 MECHANIZATION PREFERENCE CHART.. ...... ... 113 11 DERIVATION OF "NO SALVAGE VALUE FORMULA” FOR CHALLENGER'S ADVERSE MINIMUM... ...... 114 12 EXACT COMPUTATIONS FOR ARRIVING AT CHALLENGER'S ADVERSE MINIMUM............. 116 CHAPTER I INTRODUCTION In periods of rapid development farmers and manu- facturers are sometimes ahead of research in adapting new methods. Some farmers buy and some manufacturers sell . equipment and buildings that cannot be justified from cost or other viewpoints. Yet some farmers hesitate too long before they adopt new methods. Both types Of farmers en- counter losses or reduced income that to some extent could be avoided with careful planning. There is a tremendous development going on right now in the area of farm materials handling. New equipment and buildings have been presented to the farmers and several different solutions have developed for mechanization of nearly all jobs that are connected with.materials handling on the fanmstead. Still more hand labor is used in work around the farmstead than in field work and it often appears to be some disproportion between the Often highly mech- anized fieldwork and the sometimes primitive methods used in caring for the 11vestoCk. I Obviously there is Often too little planning behind today's decisions in farm mechanization, Often because of 2 lack of basic information. The area of farm materials handling as being an unorganized field is one of the most difficult phases as far as decision making on farm mechan- ization is concerned. One approach to the problem is to see what has been done in the area of materials handling in industry, where handling has been a recognized problem for a long time, and has been carefully studied. This thesis will be an attempt to go through indus- trial techniques for materials handling analysis and to discuss and determine the possibilities of these techniques being applied in agriculture. Special consideration will be given the problem of materials handling on the farmstead for the livestock enterprises. CHAPTER II REVIEW 0? LITERATURE A broad survey of industrial management techniques and their possible application in agriculture was made in 1951 (54). .Mostly discussed*with the "Pamm work Simpli- fication" movement as a basis, it was concluded that the 'field of farm.management had developed only part of the broad field that management in industry has. The case study technique used in industry was opposed to the comparative study that has been mostly adopted in farm management. Case study is the study of a single method or operation to improve it, while comparative study begins with many exis- ting methods and from them makes a selection of the best elements and synthesizes them into an improved method. The development of farm management in a framework of economics and production sciences was given as a reason for the differ- ences from industrial management, that has relied heavily upon engineering in its development. Time and motion study techniques, production planning and control, methods studies, plant layout and materials handling are main points in industrial management, while farm management has been limdted mostly to the question of combination of enterprises, 4 Four major categories of problems in industrial manage- ment are: 1. Planning what to produce' 2. Techniques in planning and controlling oper- ations 3. Techniques in improving operation methods 4. Techniques in attainment of personnel cooper- ation , Characteristics in farming hindering the application of scientific management was pointed out to be the few repetitive tasks, the size of the business, the scale of operation, the diversity in production and the lack of concentration in production. The same hinderances to the application of scien- tific management in agriculture were mentioned in another work (47) published in 1952, and primarily dealing with methods studies, which are defined as organized appli- cations of common sense to find easier and better methods of doing work. The difference between the case study and the comparative approach mostly used in agricultural studies was noted and the limitations of the latter method were indicated. An advantage pointed out was the wide variety of methods for performing the same job that is observed in comparative studies. This wide variety gives a good base for the selection of the best parts of 5 alternative methods before synthesizing these best parts into an improved method. Therblig-analysis and other types of analysis used in industry and tools and equipment were described. Different types of charts adopted by industry were shown. An application of industrial analysis methods on a hog operation (40) used mainly flow process chart analysis to evaluate different alternatives from the standpoint of time (man-hours), energy and capital requirements. Con- sideration was given to all handling on the farm, even that located in the field. The complete charting became so elaborate and the computational procedure so time consuming, that the method can be used only in very few cases on the individual farm. An analysis of the materials handling procedure on 320 livestock farms in Michigan (29) gave indications on the magnitude of different handling prdblems and the labor saved through different degrees of mechanization The relationship between capital investment and labor consumed on the investigated farms was found to be RLR = 141 - 0.0107 1. RLR is relative labor requirement ‘compared to a certain standard which for milk cows is 0.6 than-months per year. I is capital investment in materials 6 handling equipment in dollars. RLR decreased by 1.07 per cent for every hundred dollars investment. CHAPTER III MANRGEMENT ENGINEERING IN INDUSTRY "An engineer is a person who can do for one dollar what any fool could do for two dollars".(12) This is an old definition for an engineer and even if we could expect an engineer to do better than that, the sentence is used here to emphasize the importance of economic considerations in an engineer's job. "All engineering is cost engineering" (12) is another statement expressing the same idea. Undoubtedly practical engineering is largely a matter of cost. Though now'a great many engineers go into scientific work or get specialized jobs with a big concern, for many of them economic decisions are a great part of their work. From the design engineer, who for every single part has to make a decision as to material, process, finish and so on, to the one who has advanced to a leading position in management - they are all concerned with economic pro- blems. The more factors we get involved in that are to be considered, the more difficult it is to take everything .into account and make a decision based only on pure facts. Ffle get to a point where there is a whole system to consider 8 rather than single details. Integration of the parts of a system to a well balanced whole is as much or even more of a challenge to the engineer than the design of every omall detail. Development of a machine always means integration of elements to a unit. Integration of different machines to a plant is mostly included in the function called management. In industry, where enterprises of considerable size started developing long ago, the field of management and the engineer‘s role in that field has been recognized since industrialization first started. "The Engineer as an Economist" is a paper presented by Henry R. Town in 1886, which pointed out the important role the engineers were going to play in management and economic decisions. In 1911 Frederick W. Taylor presented the first edition of his "Principles of Scientific Management“, which is the first real attempt to present decision-making and management as based on scientific laws and relationships. Though most unpopular and sometimes referred to as "a diabolic scheme for the reduction of the human being to the condition of a mere machine“, (49) Taylor's ideas could not be hindered. Industrial Engineering was given as a name to the discip- .1ine founded by Taylor, because most people concerned with 9 related problems were engineers. The term Management consultant is sometimes used instead of industrial engineer to indicate that people in this field were not necessarily engineers. Today, industrial engineering, which is the term commonly used, is a very broad field including the following functions (34): Methods: Methods engineering Operations analysis Motions study Materials handling Production planning Safety Standardization work Measurements: Time study Predetermined elemental time standards Clerical procedures Wage Payment: Wage incentives Profit sharing Job evaluation ~Merit rating Wage and salary administration Controls: Production control Inventory control Quality control Cost control Budgetary control Management control 10 Plant facilities and design: Plant layout Equipment procurement and replacement Product design Tool and gage design Others: Industrial relations Suggestion systems Management research Preparation of operating and maintenance manuals This list being the result of a survey made in industry shows how versatile industrial engineering has grown and how it ties in in all phases of industry today, even if only a few companies are of a magnitude that all these different functions are developed. Recent development, mainly during the last fifteen years, has shown that the area of management now has available other and more power- ful tools that.might.make management a science as exact as engineering and economics. Operations research is the name for this new development in the area of management. The tools that are used are taken from the areas of mathematics, statistics and probability theory, econometrics and electrical engineering, just to mention some of them. Techniques as linear programming, marginal analysis, the calculus of variations, and information theory are now used to solve 11 management problems (8, 13, 44). And though the methods have been shown most useful where applications have been made, most areas of management are still not touched by these new'possibilities. PrOblems possible to solve are sometimes referred to as "well-structured" and have to satisfy the following criteria (44): 1. It can be described in terms of numerical variables, scalar and vector quantities. 2. The goals to be attained can be specified in terms of a well-defined objective function, for example the maximization of profit or the min- imization of cost. 3. There exist computational routines (algorithms) that permit the solution to be found and stated in actual numerical terms. "Ill-structured" problems, on the other hand, are those where essential variables are not numerical but symbolic or verbal. The goal is vague and nonquantitative or computational algorithms are not available. Most problems in management still belong to the "ill-structured“ type; common sense and judgement are still bound to play a predominating role in.management. But this role is going to decrease more and more as we get 12 more powerful tools for measuring and computation. With the subsistence type of farming giving way for a commercialized type of food production, more and more of these techniques adopted by industry will find a place also in planning of the farm enterprise and the farm oper- ations. Though the problems in farming, mostly because of the structure and nature of the farm industry, are some- what different from other industries, methods similar to those used in industry are needed for analysis and integration of the farm operation. Management engineering sometimes used (7, 37) to define the application of engineering training and facilities to problems of organization instead of design will be used in this thesis to define activities in farm planning and organization of the same nature as the functions of industrial engineering. Until now most interest for the field of management engineering in agriculture has been shown by the agricultural economists, a natural consequence since farm management is a part of agricultural economics. With the advent of mechanized agriculture the integration and balancing of a farm- industry takes much knowledge of an engineering nature. Management engineering in agriculture today necessarily 13 involves both agricultural engineering and agricultural economics and calls for a high degree of team work that will be most stimulating for both parties. In industry the management science as a combination of engineering and economic knowledge is well established. CHAPTER IV MATERIALS HANDLING ON THE FARMSTBAD Materials handling is old as a job but new as a science. From the primitive stage when everything had to be moved or carried by hand to the invention of the wheel and the use of animals for transportation, man has strived towards simplification of materials handling. Though being a function of management engineering itself, solution of materials handling problems requires the application of most of the other functions of management engineering too. The broadness of its scope is illustrated by the following definition of materials handling (5): "Materials handling is the picking up and putting down, moving of materials or products in any plane or combination of planes, by any means, which in- cludes storage and all movements except processing operations or end use of the material." Adding nothing to the value of the products, materials handling cost in industry often amounts to 20 to 50 per cent of the production cost (5). In farming, a livestock enterprise with 20 dairy cows includes 15 handling around 500 tons of material per year, much of it being handled several times (29). In the following table are shown amounts of materials handled per cow per year, one group of figures referring to findings in a survey made in Massachusetts on dairy farms (l9) and the other group of figures referring to dry lot feeding in high producing herds in Michigan, including young stock. TABLE 1 AMOUNTS HANDLED PER COW, TONS PER YEAR Grazing partly Drylot Feeding* (Massachusetts) Silage 6 10 Manure 6: 10 Milk 4 5 Grain 1.5 2 Ray 1 3 Bedding Q;§ _L_ Total 19 31 ‘*Personal communication, L. H. Brown, July 1958. On a dairy farm 80 per cent of the total time is spent on work at the farmstead (29), most of which can be classi- fied as materials handling. The amounts of materials moved by farmers every 16 year are considerable. The tonnage of one years pro- duction gives an idea of the magnitude of the problem, disregarding the frequency of handling and the distances involved. TABLE 2 TOTAL TONNAGE PER YEAR or AGRICULTURAL PRODUCTS IN THE U.S.A. (41,50,51,52) MILLION TONS PER YEAR (Round Numbers) Wheat, average 1945-54 43.5. Corn for grain 1955-56 83.5 Oats, average 1945-54 21.3 Barley, average 1945-54 657 All hay, including grass silage converted to dry weight, average 1945-54 103.6 Silage made from grass or hay crops, green weight, 1954 6.6 Corn silage, 1955-56 53.8 Milk, 1956 123.6 Manure, total production based on number of animals 1957 1,317.0 Fertilizer and lime, 1954 41.5 Oilseed cake & meal and animal 18.5 protein, 1953 Tonnages involved in some American industries give a good background for comparison to get an idea of the magnitude Of the problem. 17 TABLE 3 TOTAL TONNAGE PRODUCED BY SOME INDUSTRIES IN THE U.S.A. (52) MILLION TONS PER YEAR (Round Numbers) Petroleum, crude, 1956 400.0 Coal, 1955 490.8 Iron ore, 1954 88.0 In the recent developments towards a mechanized agriculture most of the progress has been in the area of field machinery, while work around the farmstead has proven not as easily adaptable to mechanization. The following indexes of output per man-hour give an indication of the lag in the mechanization of the live- stock enterprises (50). TABLE 4 INDEX or OUTPUT PER MAN-HOUR" IN FARM ENTERPRISES FOR 1956 (1947-49 = 100) Meat animals 108 Milk cows 122 Poultry 140 Peed grains 171 Ray and forage 129 rood grains 148 *Index Of farm output (production available for human use) _-divided by index of man-hour requirements, 18 At present the areas of greatest possibilities in farm mechanization are to be found in the livestock enterprises, the jobs being mainly handling of feed, manure, and products from the animals. As far as hay and forage are concerned, even the field part of the work is not yet highly mechanized. The handling Of materials on the farmstead often consists of repetitive tasks performed every day during the year, and even small savings in time amount to a considerable number Of hours per year. Considering the tonnage involved and the energy spent on materials handling, elhminations, simplification and mechanization in this area would considerably lighten and relieve ‘drudgery from farm.work. The labor requirements for different handling oper- ations as found on 320 livestock farms in Michigan (29) are shown in Appendix 1. weighted averages for farms handling the material are given, and in addition the averages for the group of farms with the least labor re- quirement for a certain operation. The table gives some idea of the present stage of materials handling on the investigated farms, and also indicates which possibilities for saving labor, that have been used on these particular famms. The figures are particularly interesting if seen 19 in relation to the amount that has to be handled every year. Using the amounts involved per year per cow as given in Table l for drylot feeding, Table 5 shows the time of handling involved per year for a milkcow including young stock. Figures are shown using the time-averages from tables in Appendix 1. TABLE 5 TIME IN HOURS PER YEAR FOR HANDLING DIFFERENT MATERIALS POR AlMILK COW INCLUDING YOUNG STOCK Hours pgg_year Averages for the Averages for the best methods, best group of all farms handling farms using the the material best method Silage 8.9* 2.4** Manure 6.2 0.0 Grain*** 5.0 1.3 Hay 5.2**e* 2.2**** Bedding 2.§**** 2.:**** Total 27.9 8.0 * Horizontal silo ** Vertical silo ***' Including grinding and mixing **** Chopped The table shows materials handling on the fanm- stead, from the time a material is unloaded until a material is loaded for transport from the farmstead. The 20 averages for all famms show that silage is taking a great deal of the total handling time, bedding being the least tnme consuming iteme On the best farms with the best methods it is interesting to note how the order and the relative importance Of different materials have changed. Silage still being the most time consuming item, has a considerably reduced time requirement. Note that the horizontal silo gave the least time requirement on all farms, but that the vertical silo required the least time amongst the best farms. Hay is second and bedding third. Bedding handling does not show’much improvement, from the average group. CHAPTER V FUNCTIONAL ANALYSIS OF MATERIALS HANDLING SYSTEMS Iefore going into the discussion of the analysis, some definitions are given on terms that will be used in accordance with their use in industry (38). gaggligg is one transport (repeated) between two points, plus the transfer before and after the transport: Traggpggg is one move of one load (repeated) over a dis- tance more than 5 feet: Transfer is a transport over a distance less than 5 feet, such as piling, tiering, loading, unloading, de-tiering, and unloading: (Unit) load is a unit of parts or package handled intact, or a single part or package. In either case, units must not vary by more than plus or minus 50 per cent from the average unit in weight and dimension: ggggggggy is number of moves per day (or year). Mathematical Model From an engineering standpoint it is most desir- able to consider the basic physical characteristics of the materials handling prOblem if a successful analysis is 22 to be carried through. A.materials handling function of the following type expressing the magnitude of a materials handling operation is theoretically conceivable. I f x , , ..... , y ( 1 x2 x xm x m+l' ..... ,xn) 3. Some of the variables could be held fixed while others were varied. x1 ....... xn would be amount of material to move volume weight of material other material properties (shape, form, etc.) distances involved other "layout-properties" speed unit load mechanical energy human energy etc. Units and measurements for several parameters are not yet available, the magnitude of the materials handling problem could possibly be expressed in man-hours, but that is a poor technical unit and considerable difficulty will be met to make the equation work unitwise. 23 Furthermore the influence on the materials handling problem by the different parameters is impossible to state or it varies widely. The value of the constants for each factor cannot be determined correctly due to the variation between situations and the interaction between the factors. In many parts the problem, like the ones mentioned earlier, is "ill structured". Check Lists and Other Techniques Used in Industry Iecause it is not possible to give the problem a strictly mathematical solution, several attempts have been made to express solutions verbally. Many check lists both for agricultural and industrial use (32, 38, 46) have been published. Some of these are very elaborate, others simple, and in spite of the lack of exactness it is helpful to check through one of them when planning a materials handling problem. NO one list is perfect and the one published here is a collection of some principles which might be of considerable value to have clearly in mind when planning a farm operation: ”* 1. Elhminate handling 2. Avoid rehandling 3. \Condense the material 4. Handle in bulk and strive for continous flow 24 5. Use largest possible unit loads 6. Minimize distances 7. Use gravity when possible 8. If possible, adopt buildings to the handling system 9. Mechanize whenever economically justified 10. Strive for versatility in buildings and equipment ~yScheduling and routing are of great importance for a successful solution of industrial materials l. handling, but of less importance on the farm, where most of the handling Operations are not of a continuous nature. Important Factors in Farm Materials Handling The interest in farm materials handling can be concentrated around these three factors: Material Layout Equipment These three, together with management, make the method. Any progress or improvement in the area of materials handling will be found in these factors. Management is the integrator of the physical factors in a system. 25 Though the only successful approach is the "systems approach" where all factors are considered together it is of interest to consider each one of these factors for analytical purpose. In that way weak points in an existing system and ideas for further development and improvements can be found. For that reason each of the factors will be handled in a separate section of this chapter. Though human energy is of great importance, and deserving of consideration in solving materials handling problems, it will not be considered in this thesis. Although intangible by nature, human energy has become the object of extensive research, and data are now available which facilitate limited computations in human energy expenditures. Energy requirements for some work on the farm as taken from an unpublished report of the Purdue Farm Cardiac Project (40) are listed in Appendix 2. Materials Characteristics A standard unit expressing the properties of the material that determine the magnitude of the handling problem is desirable for several reasons. Some of these reasons for a standard unit are: xx '7 1. Makes possible a comparison with other 26 handling methods and results in a meaningful comparison. 2. Provides a common measure Of efficiency for different materials and handling methods. 3. Enables predictions in case new'methods or changes in materials are planned. 4. Purnishes an overall measurement for identi- fication of a certain handling problem as far as materials involved are concerned. %~ Considering materials handled on the farmstead, there is no uniformity in properties. Liquid and solid type materials, bulk and packaged materials, and materials with a wide range of bulk densities are involved. TABLE 6 BULK DENSITIES FOR MATERIALS HANDLED ON THE FARMSTEAD (18) Lbs/cuft Ear corn, husked 28.0 Corn, shelled 44.8 Barley 40.0 Oats 25.6 Wheat 48.0 Hay, pelleted, large size * 20-30 pellets made from long hay 27 TABLE 6 (Continued) Lbs/cuft Hay, loose baled 10.0 Hay, ordinary baled 12-15 Hay, chopped 8-10 Hay, long loose in storage 4- S Silage 30-40 Milk 67.4** * Personal communication, J. L. Butler, July, 1958. ** Farrell, A. W. Dairy Engineering, John Wiley & Sons, New York 1953. ygmbgg. Usable as a unit for packaged material, cans, bales etc. but without specification it is arbitrary and does not provide a good standard measure. weight. The most common way to express the amount and from a practical standpoint the best is weight because amounts in storage and rations mostly are expressed as a weight. As a unit for materials handling though, weight has its limitations when materials with varying bulk densities are involved, as is the case in farm handling. In many cases the volume determines the amount of time and effort and the cost, rather than weight. Volume. An investigation of packaging cost (23) 28 showed that when packaging cost for each of 40 items was plotted against gross weight and against cube, points representing cost per pound and cost per cuft respectively were so widely scattered that no curve could be drawn. No useable relationship exists between packaging cost and weight or cube. Weight and Vglume. If the materials in the previously mentioned investigation were divided into classes according to density (lbs/cuft) the points for each density group could be joined and formulas for packaging cost computed. Figures computed according to these formulas were used as standards to check the efficiency of different handling operations. Looking at the table for bulk densities it can be seen that the materials on the farm in very few cases could be grouped together according to this classification, each being a class of its own. Volume divided by specific weight is suggested as work unit by some industrial firms (35). Another unit that the shipping freights are based on, is the unit load that one adult man can comfortably lift and carry, which is supposed to be 50 pounds or 1 cuft (53). In determining sea freight charges the weight is divided by 50 to get the "computed cube" and the "actual cube" 29 is measured. Which ever is largest, "actual" or "computed" cube determines the charge. A similar work unit applied to materials on the farm would be simple and have the advantage that it takes into consideration the both basic properties in material, i.e. weight and cube. Without a careful study of several handling operations in farm work, it is not possible to evaluate its use for analytical purposes. Time Standards. The time used for handling a material can to some extent be used to characterize the material. But time is not specifically intrinsic with the material, but depends to a great extent on layout, equip- ment, etc. Furthermore in mechanized or automatic hand- ling, the time factor has decreased in importance. For some basic, preferably manual operations, it might be used. If time standards could be made available for a great number of basic operations in materials handling, it would be of considerable value. Some examples of basic time units worked out for industry, considering both volume and weight characteristics are given in Appendix 3. Other Material Properties. A unit for material properties should be a true index Of the useful work performed to handle the material (53). As such it can 30 not be limited to the basic properties weight and volume, but should also include several other properties as fluidity, viscosity, size of particles and tendency to stick together. Many of these properties are beyond what we can get a measurement for. May is an excellent example of a material that can appear in several different forms, and in which several properties are changed in going from one form to another. Feeding silage only to milk cows involves around three times as much weight as feeding hay only as roughage. Still a silage feeding program is considered easier by most farmers because Of easier handling and possibilities for mechanization. Water, being the largest tonnage involved in farming, generally offers the least problem because of its fluid character- istics. These few examples indicate the great importance Of other materials properties than weight and volume, the possibility to fluidize being a most desirable characteristic. Layout Analysis The layout - the arrangement of work places, storage and routes - is most important for the materials handling function. A functional layout should provide the best possible facilities for the production process 31 as a whole and would affect the following functions: “i l. Distances involved 2. Namber of rehandlings 3. Flow of material 4. Mechanical equipment needed 5. Possibilities to mechanize 6. Haman energy input 7. Versatility in production TO get an overall expression for how good a layout is, is difficult or impossible if everything should be considered. Without a.measurement it is hard to make an appraisal of how good a present or planned layout is and to make comparisons between them. Design of a layout lacks computational procedures to solve the problem.\; Though the whole layout cannot be solved as a mathematical problem, some techniques and computational methods are available, which are helpful in solution of part of the problem. Flow Diagram. A flow diagram is simply a floor- plan with lines representing the flow of material. It can be used on a single work place, within a building or for the whole farmstead layout. As a first inspection of a layout it is a good way to illustrate long distances, 32 backtracking, crisscrossing, and bottlenecks in the layout if the process to study is not too complicated. Many things become Obvious on a flow diagram, which are hard to see otherwise, and it is wise to work the re- locations on a flow diagram, to see how it affects the total flow, before the changes are realized. The method with drawn flow diagrams can be refined and made more illustrative if templates or three-dimensional models are - used. Drawn to scale, usually % inch = 1 foot (1), the flow diagram can be used to determine the distance moved in a certain layout. Strings used instead Of drawn lines are good aids to make the planning more flexible, and works better for complicated processes. The distance moved is conveniently represented by the total length of the string. . Appendix 4 shows an example of a flow diagram. Flow Process Chart. A layout planning chart is a flow process chart that is especially applied to study of a layout. A flow process chart is a record Of all activities, and classifies and summarizes the various kinds of activities during a series of operations. Time is taken and distances measured (1). A suggested flow process chart or layout planning chart is shown in 33 Appendix 5. It is not possible to evaluate and measure a layout only, because method, equipment, etc. also show up in the suggested chart. Adding the columns for livestock, processes move- ments and storage gives an indication of the complication of the process and how it compares with others. Especially the number of movements (20) is a figure to watch, when evaluating the layout. This figure gives the number of rehandlings the material has to go through before the process is completed. The less the number of rehandlings in relation to the number of processes on livestock stations, the better is the layout. A rehandling factor, expressing the number of rehandlings for a certain system, could well be used as one comparison in evaluating different layouts. Distance and weight. Distance multiplied by weight sometimes used as a measurement for the handling (26) is a means to put certain weights on every distance. It is a way to tell how'important every distance is considering the amount of material that has to be handled over the distance. This type of expression has the advantage that it makes every distance more meaningful, but there are other limitations to it. In a certain system the amount 34 of handling, weight and distance can be minimized if the layout is placed in a coordinate system and the dis- tances minimized according to conventional formulas used in mathematics for the distance between two points in a coordinate systemi Accepting this way of computing means accepting that moving 1 pound over 1000 feet is the same as moving 1000 pounds over 1 foot. Such a unit cannot be physically justified and neither cost nor time can be expected to vary according to this unit. From.a cost and time standpoint, the shorter the distance the greater the influence of weight and the less the influence of dis- tance. When materials are moved a long distance or if the transfer is automatic, the handling cost can be considered as somewhat proportional to distance. Still the influence of weight and distance respectively is not possible to determine in a general way. A hypothetical graph for time of handling material (could be hay or grain) is shown in Figure l. The comparatively small influence of transport time in a small area as a farmstead is seen from the graph. Assumptions made when drawing the graph are: Loading and unloading takes 0.6 man-hours per ton Speed of travel is 200 feet per minute Unit load is 200 pounds 3S I.5i— Handling I ton Transfer time 0.6 man-hours per ton r Unit load 200 lbs Speed of travel 200 ft per min (- LO _ ‘ — 3 o .C .E - l4 3 Transport ‘- O ... 0.5 .. Transfer time EL l I l 1 I00 ‘ 200 300 400 500 Distance in ft Figure I Time for Handling Material over Different Distances Transport time in per cent of total handling time 36 This graph is a very simple example of a common handling procedure but indicates that the distances in- volved have to be judged carefully and that too much should not be sacrificed to minimize distances. In case of automatic or mechanized handling the importance of dis- tance might be still less because the time is generally of less importance if man-hours are not involved. The cost of equipment, though, is affected by distance. In some cases. where the distance extends beyond the range of certain eqmipment. its influence on cost could be very high. The importance of distance may not be over emphasized as a factor in designing and evaluating a layout. Still. for the whole layout. if every move is counted, the distance involved gives some indication of how good a layout is. Cross Charts. In most cases for the farmstead, where the layout is comparatively simple, a flowhdiagram and a flow process chart is sufficient for examination of a layout. The flow diagram is an aim to visualize the layout and the flow'process chart a means to break down the process into its component parts and to express amounts, distances, and time involved. The cross charts sometimes applied in industrial use (30,31) seem to have 37 little place in analysis of the farmstead layout. A refinement of the cross chart is the linear programming technique applied on transportation problems (15, 20). Being most useful in problems involving assignment (which truck to carry which load), scheduling, (determine routes for trucks) and shipping, (which stores to supply which consumers), its application in problems encountered in farm.materials handling is difficult to find. But the technique of linear programming is promising and there might be found some applications to transportation problems on farms. Other Pactgrs in the Layout. Size of doors, width of aisles, ceiling height, obstructions as poles or partitions, etc. are other factors, that together some- times affect the efficiency of a layout more than distance and location. Equipment Characteristics Powe Re rements. The third factor affecting the materials handling is machinery and equipment. As far as it is economically justifiable it is desirable to substitute man power with machinery. Man is a poor power producer and expensive. Figures published by the Electric Industrial Truck Association show that l horsepower-hour 38 produced by man costs around $10 while it costs only $0.04 if developed by electric motor (32). This com- parison is inaccurate because in one case (man power) the total cost is shown while in the other (electricity) only the power cost, but it gives an indication of how ex- pensive horsepower is when produced by man. Though the efficiency sometimes is low; in materials handling equipment, they still can compete very favorably with man power as far as power cost is concerned, the power cost in many cases being negligible. Different.materials handling equipment still show a wide range if their power requirements are figured as KWh per ton. TABLE 7 POWER REQUIREMENTS FOR DIFFERENT MATERIALS HANDLIM 3mm Equipment KWh/Ton Conditions Ref. Bucket 0.06 .Material'with bulk density 27 elevator 50 lbs/ouft Capacity 25 - 60 tons/hr Vertical transport, 30-50 ft Screw 0.05- Wheat 36 conveyor 0.25 13-31 tons/hr Inclination 10 - 90° Pneumatic 0.7- Grain 30 conveyor 0.9 2 tons/hr Horizontal or vertical transport 39 TABLE 7 (Continued) Equipment KWh/Ton Conditions Ref. Forage blower 1.3 Alfalfa-tbmothy silage, 39 k in lengths 36 tons/hr Silo unloader 4.3 Grass silage 2 0.27-l.5 tons/hr Surface unloading The range for common materials handling equipment seems to be within 1 kwh per ton. This is certainly enough to encourage research and development, but on the other hand is not a big enough difference to weigh too heavily in the choice between different handling equipment on the farm- stead. The amount handled by the same machine or equipment is seldom more than 500 tons, which.means 500 kwh or about $10 per year in power cost. The limiting factor for mechanization is the high capital investment required, the main question being how'much equipment can be afforded. This question will be discussed in the next chapter. I Unit Load. In case of manual handling or handling by truck or cart, the question of unit load is important. Being a function of.material and equipment,unit load will be discussed here. Going badk to the example used earlier, 40 the importance of greatest possible unit load can be illustrated by the graph, Figure 2. From the graph it can be seen how important the unit load is, especially over great distances, but also how relatively small part of the handling time the transport time is. The two extreme cases of this graph would be: 1. Automatic loading and unloading, no transfer tmme and the time (man-hrs) would be equal to travel time and vary with distance; 2. Automatic transport (elevator, screw conveyor) but manual transfer of material. Time (man-hrs) equal to transfer time and does not vary with distance. Case 1 is not common in farm materials handling, more so Case 2 and it appears that.most of the handling operations in modern farming are going to be a combination of l and 2 with no transfer time and automatic transport. Degreg of Mechanization. Though the highest possible mechanization is not always economical, a measurement for the degree of mechanization is desirable. A measurement that is physically correct is not achievable without complicated measuring devices. One that possibly might give some indication of how highly mechanized a handling system is, and also serve for the purpose of in hours Time 41 Handling l ton Transfer time 0.6 man-hours per ton Speed of travel 200 ft per’min . I " g I p i i I l l A I00 200 300 400 500 Distance in ft Figure‘z Time for Handling Material over Different Distances and with Varying Unit Load 0| .5 0| 0 A 0' Transport time in per cent of total handling time 42 comparison between systems is outlined here. The following abbreviations are used: A (lbs or tons) 3 Amount of material handled. Weight counted for every rehandling. Am (lbs or tons) = Amount of material handled mechanically. weight counted for every rehandling. Im.: Index of mechanization for handling. Consider the following example to illustrate the use of this formula. In a grain handling system the handling sequence on the fammetead is as follows: Manual 1. 5000 lbs of grain unloaded by auger 2. 2000 lbs of the grain bagged 2000 3. lags loaded on truck 2000 4. 3000 lbs shoveled into 3000 conveyor 5. 3000 lbs conveyed 6. Ground on hammermill and blown to hopper 7. Emptied from hopper to feed cart (gravity) 8. Feed cart pushed to 3000 feeding area 9. Bed from feed cart 3000 Total 13000 Mech. Total 5000 5000 2000 2000 3000 3000 3000 3000 3000 3000 3000 3000 3000 14000 27000 This index might be criticized as not regarding dis- tances involved but in connection to the previous discussion of the relative importance of distance, it is considered to be a usable measure for the degree of mechanization on the farmstead. It is not to any ex- tent a measure of how good a handling system is from an economic standpoint, just an indication of how mechanized* the handling procedure is. Another attempt to classify the degree of mechanization, and at the same time list the equipment, is given in Appendix 6. This list is based on the following definitions: Manual. Handling activities in which no power equipment is used. Basic tools (forks, baskets, carts) could be used as long as it is not powered. Sal-mechanized. Powered equipments are used. Still a considerable amount of man power and man time is involved. Equipent that has to be fed and/or where distribution has to be made by hand. W Han power is practically eliminated in the handling, but man time is still required for supervision or to operate the machine . 44 Aggggatig. Both man power and man time eliminated. The only effort by man is to push buttons or release handles to start or shut off the process, or that could be made automatically too. Though no power is involved, self- feeding of animals and feed by gravity had been included in this category because the arrangement or investment in ’ buildings or storage is considered to be comparable to investment in machinery. CHAPTER VI COST ANALYSIS OF MATERIALS HANDLING SYSTEMS Cost Computations After the attempt to approach the pure physical properties of the materials handling problem on the farmstead, the following statements might be justified: l. The physical properties of the materials handling problem are not well defined, and the only feasible measurement to express efficiency and to compare systems seems to be cost. 2. The influence of the different factors in materials handling (material, layout and equipment) are difficult to isolate. Thinking must rather be in terms of systems than in terms of the different components in the system, when making studies of materials handling. Cost like time is in many respects a poor measure- ment, but it is practical and most meaningful. Today most materials handling jobs can be mechanized with available machinery and through arrangements in layout. The only limitation for complete mechanization is cost. ”The Nature of Cost. Since farms are getting larger and with steadily increasing mechanization, 46 the investments in a.modern fans are considerable. As capital cost is one of the major items in cost estimates, careful consideration has to be given to the mathematical model used for computations. Even.knowing that the data used in the computations have some possible errors involved, there is no excuse for using a less accurate computational method. Since the concept of cost varies greatly, clear definitions are needed for the cost concept. The break— down of costs that will be recommended for materials handling cost esthmates, whether concerning machinery and equipment or buildings, follows: Fixed costs or overhead Depreciation Interest Taxes, insurance Repair and maintenance Variable cost or operating cost Power, fuel, etc. Labor Consideration of each one of these cost elements will be given. 47 gaggggiatigg. According to generally accepted business principles depreciation is based on recovery cost rather than being a provision for replacement (21). For accounting purposes several different.methods of figuring depreciation are available (48) which there is little reason to use for cost estnmation. Charged as part of the yearly cost it is most logical to distribute the depreciation cost evenly over the numbers of years that the asset is assumed to be in use, especially in cases where the service rendered by the asset most likely is going to be the same over the span of its life. Its value in the open.market is of little meaning as long as it is not sold or traded and should not affect cost calculations. Straight line depreciation with cost evenly distributed over the years is D .. P a L (I) where: D - depreciation per year P first cost of asset L - estimated salvage value n = esthmated life of asset, years Salvage value, L, is in many cases negligible, being so mmall that an error in esthmation or omission would not affect the result too much except for assets with a short 48 life. The major errors are caused by errors in "n", the service life, which must be estimated considering not only physical but also economical life of machinery and buildings. Not knowing about future developments in technology, this is a most difficult figure to arrive at. According to present day expectation 10 — 15 years seems to be reasonable assumptions for service life of materials handling equipment (29). The variations are wide due to the hours of use and the kind of service. In cases where estimated life of eqmipment is available in terms of hours, this figure usually gives a better background for estimations. In cases where obsolesence is the major ' cause of depreciation, judgement and best possible pre- dictions must be used. Buildings (here including all kinds of storage, grainaries and silos) used to be esthmated to a service life of 40 - 50 years or more. which has proven too long, at least for the economic life of the kind of structure for which it was used. Careful estimates for todays modern structures runs around 20 - . 30 years which certainly in many cases is less than their technical life. With todays modern farm structures, being clear span buildings without partitions, stanchions or other fixed installments, it might even be considered if not more than 25 years could be reasonable, as the 49 versatility in the structures seem to leave some guarantee for usefulness even with changes occuring in farming. Milking parlors and some other structures where technological changes can be expected have to be estimated carefully and more than 15 - 20 years life is probably optimistic. Though depreciation partly is a function of hours of use, it is generally considered as being a fixed cost. at r p . On invested money, interest should be figured according to the interest on the money in alter- nate use. Less than current interest paid in banks is never justifiable to use, because the bank always is an alternative and is available. The scarcer the money the higher is the interest in alternative uses and the less the challenge from prOjects with long life and/or high investment. Less than 5 per cent and more than 15 per cent interest is not feasible in our present situation, around 10 per cent being a frequently used average in industry (43). Interest in machinery cost computations is usually figured on the average investment according to the following formula (4): P + L 2 I s 1 (II) where I 2 Interest per year 50 P = first cost of the asset L estimated salvage value 1 the rate of interest (decimal) A more exact method is to figure the interest on unrecovered balance. Interest for the first year being (P - L)i e Li and for the n-th year fg'fi'é') 1 * Li . Usually, when this method is used, an average is taken between the first and the last (n-th) year which results in average interest on unrecovered balance. [FL-1);] + I = (p - L) n 2 Li (III) The formula neglecting salvage value reduces to: (48) . I:g_2_i_(n;l) (IV) Capital Recoyggy Pactgr. Added together annual depreciation and interest gives the total yearly capital cost. The factor with which to multiply the present value of an investment to arrive at the yearly cost, (R). is called capital recovery factor (CRP). Yearly cost can be computed according to the following methods: . _1. Capital recovery at 0% and interest on the average investment P-L+(P+ L)i (V) 51 2. Straight line depreciation and average interest on unrecovered balance - 1 n + 1 i v R -(P " 14L":- "(—r') E]* L1 ‘ I) 3. Using compound interest formula (capital recovery factor from table) n R =(P - L{1 (1 * fl ] + L1 (VII) 1 (1 +1)“- The different methods for computing yearly cost are illustrated by the following example solved in three different ways. Consider an investment of $25,000 with 8%.interest and depreciation in 20 years, no salvage value. 1. R ; 25:30 +(2sogo + o) 0 03 .-..- 2250 _1 +20 + l )m .0 - 0 x 0.1 2. R = 25000 20 20 2 2300 3. R 3 25000 x 0.10185 3 2546 $2546 per year for 20 years will exactly pay back $25,000 with 8 per cent interest and is the actual cost of capital recovery. For assets with long life and when the interest rate is high, the error in using methods 1 and 2 is con- siderable. In case of such assets (i.e. buildings) method 3 is recommended. For assets with short life method 1 52 could be used at least for a rough estimate because of its simplicity. Note that for short life assets (less than 10 years) the methods used for computing CRP is of little importance compared to the importance of correct estfmate of years of life. Appendix 7 has a table for comparison of the error in using different.methods for figuring capital recovery. “Good judgement is essential in determining both years of life and depreciation rate. As will be shown later, the sometimes appearing policy to estimate a short life and keep interest high "to be safe“ can be very harmful too with respect to replacements. Such a policy preserves the present stage of technology longer than is really justified. Tax and Insurancg. Charges for taxes and insurance varies widely between different states and locations. If exact rates are not known, 1 per cent of original cost for property tax and 0.25 per cent of original cost for insurance is suggested (31). Repair and Maintenance. Repair and maintenance falls between fixed and variable costs. To some extent and for some items (structures) it is mostly a fixed cost while in other cases it depends more on hours of use. An 53 evenly distributed repair cost taken as a percentage of the first cost is commonly used but does not give a true picture of the actual timing. Major overhauls might occur every 5th or 10th year or more seldom for structures, the rest of the repairs and maintenance occurring at a rate of diminishing increase. Because of our imperfect knowledge of the future it is hardly possible to arrive at a cost distribution that is anywhere close to the exact, and this is why the method predominantly used is to take a certain percentage of the first cost. Several authors have published suggestions for annual repair cost in per cent of first cost, some based on estimates, others on surveys made on farms. Unfortunately few’of them include materials handling equipment or related structures. Published data for materials handling equip- ment (29) show approximately the following yearly average cost for repair and maintenance. Tam 8 ANNUAL REPAIR COST IN PER CENT OF FIRST COST FOR.MATBRIALS HANDLING EQUIPMENT Equipment Per cent of first cost Chain or belt elevator 1.5 Blowers 2.0 54 TABLE 8 (continued) Equipment Per cent of 1 first cost Auger elevators, barn cleaners, mechanical feeders, tractor loaders, feed mixers 3.0 Self unloading wagons, hay hoists 5.0 For storage structures (16) used for grain, the following yearly maintenance was found on Indiana farms. TABLE 9 AVERAGE ANNUAL MAINTENANCE COST FOR GRAIN STORAGE STRUCTURES Structure Per cent of first cost Bins in cribs and other buildings 0.30 Sheet metal bins 0.20 Prefabricated wooden bins ‘ 0.40 Por structures a figure around 1.5 per cent is commonly used (6), but some modern structures can be considered to be practically free from all requirements of future maintenance. Though it can be criticized that annual repair and maintenance, as well as taxes and insurance, are figured as a percentage of the first cost, the method 55 will be used here for the.sake of convenience. It will also be shown that the error introduced that way is not of any great importance for the final result. A handy expression to work with is arrived at if the percentages for capital recovery, taxes and insurance, and repair and maintenance expressed as decimals are added together. The sum is an "Overhead Cost Factor" In Figure 3 a screw conveyor is taken as an example, and the factor is shown for different .estimated lengths of life and for different interest rates. Figure 4 shows a similar graph for a structural asset. The graphs show clearly how small a part of the "Overhead Cost Factor" is made up of repairs, maintenance, taxes and insurance, which fact might justify using the approx- imate method of figuring these costs as a percentage of the first cost. If interest is figured on average investment neglecting compound interest, or if the service life is not estimated correctly, the deviation is several times greater than the deviation due to any possible error in estimates of taxes, insurance, repair and maintenance figured as a percentage of first cost, at least for high interest rates and long lives. Power Cost. Power cost can usually be figured 0.24 0 .23 0.22 Cost Factor Overhead Figure 3 S6 — I0 years of life --- I3 years of life --- l5 years of life ’e I . ” .I. I r / a ,I X .’ i‘ .I I .I x f .r V ” ’.’e x“ .t‘ (b .’ I” L" 5 6 7 8 9 I0 II I2 Per Cent Interest Overhead Cast Factor for Screw Conveyor at Different Interest Rates and Expected .Years of Life Taxes 8: Insurance Factor= 0. 0I25 Repair 8 Maintenance Factor I 0. 0270 0.l9 0 .l8 0J3 0.l2 Overhead Cost Factor 0." 0 .I0 0.09 , Figure 4 57 ----o 20 -0-.- 25 ...-e. w --.-Q 40 —e-50 years of life years of life years of life years of Iite years of life years of life I I .I: ’7 .0’.’ I’ .’.e ’0’ ’r .’ e’..{ ’I .’ .”I .I‘ . I ' .’. ’1 . . 0’. it 5 5 7 8 9 l0 II I2 Per Cent Interest Overhead Cost Factor for Structural Asset at Different Interest Rates and Expected Years of Life Taxes 8 Insurance Factors 0. OI25 Repair 8 Maintenance Factor 8 O. OISO 58 from actual figures for the source of power used. If an electric motor is mounted on the equipment. fixed costs for the motor are usually included in the fixed cost for the implement, electric energy being the only power cost. When electric motors are used for several purposes, the fixed cost for the motor has to be charged to the different uses. If divided between materials handling equipment and some other use, a certain amount per year (in proportion to use) has to be charged to the handling operation and added to its fixed cost. The cost of electric energy is added to the variable cost. Note that electric motors often have considerably longer life than the handling equipment. In cases where farm.tractors are used as power source the average fixed cost per hour plus fuel costs are charged to materials handling. When electric motor or tractor power are available and can be used for materials handling equipment, only marginal or added cost for the extra use should be used for comparison with other power sources. The marginal cost is the extra cost caused by the extended use and is principally equal to fuel or electricity cost. The power cost for materials handling equipment is mostly too small to be of any great significance in cost comparisons. 59 Labor Cost. The cost for manual labor is a major part of the variable cost for many materials handling operations. but it is very difficult to determine without extensive studies. For a planned system many of the steps are not even possible to study and judgement must be made from shmilar prodecures in other jobs. The difficulties in estimation of labor cost result.from.the following: 1. The time elements are not known 2. The value of the saved labor is usually not known Development of time standards for different elements of handling would be most helpful in computations. A.stan— dard time is desirable representing the best a good.man can do using best known techniques for a certain system rather than an average from a number of farms including bad as well as good operators. A.standard should tell the time an operation should take rather than recording the time it actually takes. It should be something to check one's own operation and alternative operations against, not just a statistical presentation of the average situation on a number of farms at present. It is believed, that intense methods studies on only a few farms. including methods improvement along with the study, would be the proper procedure in developing standards. 60 Broad surveys including a great number of farms, however interesting and useful for other purposes, are usually a poor basis for development of time standards. In comparing systems, cost should be figured on standard times to giVe a correct comparison. With stan- dard thmes available it would be found in some cases that methods improvement is what is really needed rather than new equipment and buildings. Knowing the efficiency in a present system through comparing actual time with standard time gives a good indication of what efficiency could be expected in a prospective system when methods improvements can not be carried through (in cases where human or other factors can not be changed). Lacking these standards, today's situation is that there is usually no basis for a correct comparison. The best that can be done is to take the few data available and apply common sense and judgement on them. Other measurements attempted to apply in the first part of this thesis generally fail to express what is desirable to know about a system. Time, in spite of its limi- tations as an exact.measurement, seems to be the only way to measure a materials handling system. 61 The other difficulty. to evaluate the labor that is saved, can not be solved by some standards. To put the hourly wage rate on an hour saved is not always correct and to find the "opportunity cost" is rather difficult. It is generally desirable. though, to figure savings and expenditures from the standpoint of the business, which talks for the use of the hourly wage rate in estimating the value of saved labor. D t S s. For the appraisal of a present system and in comparison between alternative systems and with standards, many data must be gathered. Suggested sheets for gathering these data are included in .'Appendix 8. Eggipgent Selection Charts. An extensive indivi- dual analysis is in many cases not possible in farming like in industry for planning a materials handling system. The high cost for the usually small operations is pro- hibitive. As an aid in extension or consulting work out in the field. an equipment selection chart can be worked out. Handling characteristics for different equipment is listed in.this chart and suitability for different working ranges can be indicated. A basis for this chart, besides technical specifications for the equipment. is a break- even analysis. A break-even point is a common point for 62 two or more variable situations (17). If functions have one variable in common. a break-even point exists. The functions under consideration could be c1 = fl (x) c2 f2 (1:) where C1 and C2 = annual cost or total cost or cost per day or cost per piece and x = extent of operation per year or expected life or expected period of operation werking under the assumption of a straight line cost curve with a base of fixed cost and a tapered part of variable cost, graphs representing the cost for two different machines for a certain job could be represented as in Figure 5. The equations for the two lines could be written: where y , y = cost per year 1 2 63 — System A 250 .--m. System B I R AK- VEN POINT ' 3 200 ' , , >. I 5 O. 1' I50 ' 2 :2 ‘2'} 0 I00. .3 ‘6 .- SO H IOOO 2000 Number of units handled per year Figure 5 Break-Even Chart 64 x , x = number of units 5 b I ' variable cost per unit (3 slope of the cost curve) B1 , B 8 fixed cost (total) The point of intersectiOn, break-even point, can be read from the graph or arrived at through solving the two equations for y1 = y2, x = x 1 2 A B-Ax B 1x+ 1 2 + 2 32-131 x3 A1'1‘2 The break-even chart could be used for a single machine as well as for a system with several components, where fixed and variable costs for the component parts can be added to a "system cost curve". The characteristics of a.machine. if marked in the machinery selection chart, Appendix 9, can then be matched against desired characteristics, and conclusions about the suitability of different equipment can be arrived at. The machinery selection chart is not an exact method to use. Its value depends wholly on how careful 65 and thorough the analysis that has proceeded the making of the chart. Carefully made and used with judgement it can be a very good help to avoid overlooking things in equipment selection and to roughly point out which equipment to select. The characteristics desired are numerous but vary widely between different handling operations, like do the intervals for the characteristics. No attempt has been made to work out a general standard for an-equipment selection chart. The one shown in Appendix 9 just gives an idea of the form and procedure of making such charts. Scale of Operation. Until DOW’the discussion. with one exception, has been limited to either total cost or average cost, all the time assmming that there were a given amount that has to be handled. thice must here be given to the fact that a considerable amount of efficiency is due to the scale of operation. If the total cost curves drawn in Figure 5 are converted to unit cost curves, the diminishing unit cost is readily shown in Figure 6. With the model used here, the unit cost is diminishing all the time, while a more true picture would show that the unit cost reaches a minimum and then will start increasing again. This increase for materials handling 66 0 .30 —— System A ' -----. Sys'ém B 0.25 0.2 0 Dollars o 6 Unh cost .0 6 0 .05 A _ W IQOO 2000 Number of units handled per year Figure 6 Unit Cost Curves 67 equipment can not be expected to occur until the lbmit for the capacity is reached. The capacity limit for some equipment (silo blowers. screw conveyors for self unloading wagons) is very important. while for some others (bunkfeeders, barn cleaners) it has less signif- icance. The rmportance of the decreased unit cost (efficiency due to scale) is so great, that in the future in many cases the production has to be matched to the system rather than the opposite. to approach the minimum point on the cost curve, which practically means that production will be carried on close to the capacity limit. This is somewhat different from the approach in industry. but is exactly what is going on in milk pro- duction today, where many dairy herds are expanded beyond the point where most of the feed can be produced on the farm. The man and the equipment is the framework to which the production has to be fitted, and production extends to the limit of the system. Marginal Cost Analysis. For a refined and exact analysis in modern production economic analysis, marginal cost is used instead of average cost todetermine accur- ately the scale of operation and the least costly combination of inputs. Under conditions of scarce '68 resources to be allocated between different production factors an accurate allocation can he arrived at con- sidering incremental and second order conditions of the output function (second order conditions or the first derivative of a production function gives the marginal or incremental cost) (9, 22). Production is carried on until marginal cost is equal to marginal output. which under certain conditions and for a limited time might mean operation above minimum average cost as profitable. These clearly defined concepts which are computable with exact mathematical expressions, are somewhat difficult to apply on the cost analysis of the materials handling prOblem for these reasons (16): l. A clearly defined common denominator for the outputs is not available. 2. The choice is between methods rather than between quantities of input. 3. Inputs are discontinuous scattered points that are not numerous enough to form a continuous curve. Unable to apply conventional marginal analysis correctly, the way to compare alternatives is to consider total cost and total return. From this basis a mechanization preference list can be made up for ranking 69 different alternatives in mechanization which could be used also for comparison with other potential alternatives for use of money (Appendix 10). Other Mephpgs for Cost Comparison. The previous discussion has been based on the unit cost or annual cost for cost comparisons. Several other methods are used in industry, the ones mostly referred to listed below (25) : 1. Equivalent uniform annual cost 2. Present worth method 3. Capitalized cost 4. Rate of return on investment 5. Time required for investment to pay for itself (pay off period) Methods 2 - 5 as not presented before will be briefly described here. Present worth Method. By this method money-time series are converhd to one single payment. The present worth is an expression for how'much has to be placed in a bank today to pay for all future costs for a given number of years. The period of time used for comparison must be the least common multiple of years for the alternatives to be compared. Capitalizpd Cos . The difference between present 7O worth and capitalized cost is that the latter is considering perpetual service instead of a given period of time. The following relationships between methods 1 - 3 should be realized: n prggent worth x[_1_-_L1__+_1.L__]= Equivalent annual cost . (l + i)n — 1 Equivalent annual cost / i - capitalized cost. Rgtprn pn Ipvestment and Pay Off Pgriod. In cases where service life or interest will be compared for different alternatives or to find break-even points for service life or interest rate. the capital recovery factor in the computations could be the unknown and solved for. From an interest table, with service life given, an interest rate can be found and if an interest rate is assumed service life can be determined. It is for the purpose of illustration helpful to compare alternatives in terms of return on investment or pay off period. A variation in service life and interest rate. factors where a great deal of possible error is involved, gives a good concept of the importance of probable errors. Of these different methods, some of which are given much consideration in engineering economy (10, 28) 71 methods 4 and 5 have some possibilities to give a good illustration of an equipment investment, while 2 and 3 probably are more confusing than helpful. Replpcppent gpeopy With a careful study of available systems and techniques as outlined before, the least costly method of handling a certain amount can be determined. The present situation is. that there are lots of labor- consuming systems in use in farming. Obsolete but still with.many years of service life left. One of the most difficult decisions to make from a.management standpoint is to give up an old system, that is not worn out, and adopt new'methods. In materials handling, where the question is not only to give up some pieces of equipment but often also old buildings and other items with high capital investment, Obsolete methods have a tendency to be preserved longer than they should. It is Obvious today, that a great many old systems could be replaced ‘with a considerable economic advantage. A.method is needed to tell when the point for replacement is reached and also to express the loss of not replacing. .MAPI (Machinery & Allied Products Institute) has carried on considerable research in the area of replacement 72 theory (33, 43, 46) and the method they developed has been used with a great deal of success in industry. Its main principles and its possible applications in the area of replacement on the farm will be discussed. Some special terms commonly used in the discussion of a replacement problem are developed by MAPI: nggndgr is the system or equipment used at the present Challenger is a proposed equipment or system Time-adjusted annual average is a uniform.annual equiv- alent amount. not an arithmetic average. It is based on selected interest rate and service life. W is the lowest time-adjusted annual average of operating inferiority and capital cost Obtainable from the equipment in question Operating inferiority is the amount (expressed in dollars) by which a facility is operationally inferior to its best alternative. Operating inferiority is due to deterioration and obsolescence. Annual inferigrity gradient is the yearly amount (expressed in dollars per year) of operating inferiority which the challenger accumulates. The longer the depreciation time is for an asset, the less its capital cost. and the longer it will stand the challenge from renewal. To make a fair comparison, 73 the operating inferiority should be charged against the equipment also, besides the capital cost. The cost curve for equipment over a number of years looks like the graph in Figure 7. From the graph it is seen that the adverse minimum is at 16 to 17 years of life, which would be the number of years to keep the asset for minimum cost. As the graph is drawn, operating inferiority is supposed to increase at a constant rate and this assumption for an estimate of the future seems reasonable for many types of machinery and equipment (46). In comparing alternatives. the one with the lowest time-adjusted average or adverse minimum is the cheapest. When a new alternative occurs, with a lower adverse minfmum than that of the system in use. replace- ment should take place. This is because the comparison is made between a succession of either the defender and the challenger or of the challenger only. The difference between the two successions will occur before the challenger is installed. With a higher adverse minimum a challenger will be more expensive to keep. If the challenger has a higher adverse minimum than the defender replacement should not take place. 74 I I F l l “ mm- Operoiing inferiority 440° 1 mm Capitol Cost ~ — Operating Inferioriiy + 4000 .Capitol Cost 4 x l I. I . \ V R 3600 ‘ \ 3200 - 3 “ 2. 2300 4* 3 ‘\ ° 2400 LL :3 "~ o “s : 2000 hL‘ C> C. O ~~~J [600 'e'.. ‘5 I. ’. O 01?... ° IZOO ' ' ...“..90 800 “in" no”... 400 "-'” 2 4 6 8 I0 I2 i4 I6 i8 20 Service life Years Figure 7 Cost Curve for Determining Adverse Minimum The curves are drawn from date shown in Appendix i2 -~ 75 The adverse minimum for a challenger can be computed after assumptions about the annual inferiority gradient have been made. Operating inferiority has to be converted to present worth and then transferred to time-adjusted annual averages through multiplication by capital-recovery factor. This factor multiplied by initial cost gives the time-adjusted annual average of capital cost. Appendix 12 shows how these computations can be made for the adverse minimum Of a challenger. Future capital additions and expected salvage value can be included in the computations. Similar computations for determination of the defenders adverse minimum are possible. The advantages with the system outlined here are: l. The future and the present will be considered, not the past. 2. Comparisons will be made using the best present alternative as standard. 3. Future operating inferiority for the challenger will be taken into account. 4. The cost of not replacing is available from the computations. The method shown above to arrive at the adverse minbmmm is too complicated to be practical. A short-cut 76 method has been developed that considerably shortens the computations and still for most purposes has proven accurate enough (46). This short-cut method is developed with the following three assumptions: 1. Future challengers will have the same adverse minimum as the present one. 2. The present challenger will accumulate operating inferiority at a constant rate over its service life. 3. For a defender the time-adjusted average of capital cost and operating inferiority for next year is less than for any other year in the future. That is to assume that the defender at the time for the challengefis at, or to the right of the adverse minimum of the cost curve, Figure 7. The first assumption does not mean that there could not in the future be challengers with an adverse minimum lower than the present one: it only indicates that the comparison is made with an infinite succession of challengers with the present Challenger's adverse minimum. The second assumption is as realistic as any other assumption for the future, and is a necessity to 77 simplify the computations. The great difficulty is in determining the annual inferiority gradient, but the most unrealistic assumption is not to consider the gradient. The third assumption is also acceptable.— At a point where replacement is considered, the asset is mostly at a part of the curve where the cost is increasing, i.e. to the right of the adverse minimum.where the increase in operating inferiority is predominately over the savings in capital cost for future service. This is an assumption that certainly applies on most materials handling systems, at least when old buildings are included. Formulaes for deriving a Challenger's adverse minimum.have been developed. One is considering salvage value while another is neglecting it. It has been proven, though, that in cases where the salvage value is not effective within the first five years of service or if it is less than 10 per cent of the acquisition cost, it is negligible (46). As the defender's and the challenger's adverse minimum are the background for the comparison, the procedure for their computation will be given here. ngegder's Adverse Minimum. Accepting the assumption that next year is the defender's adverse 78 minimum, simplifies the computations considerably. The operating inferiority is arrived at simply through com- parison of next yeafs operating costs for defender and challenger, the difference being the operating inferiority for the defender (or the challenger). Even expansion made possible through change to the challenger are taken into account. This consideration is most important because a simplified materials handling system on a fanmstead is usually followed by an expansion. The capital cost for the next year is the decrease in salvage value during the year and interest' on the salvage value at the beginning of the year. In some cases a defender requires capital addition to be usable for future service and considering the period of the expected life for the capital addition. The defender's adverse average is computed as following: Adverse average a next year's inferiority + + ginz- l) + c - s + igc 3 s) n where: :3 I ' period of additional service c 8 the present investment (the sum of capital addition and present salvage value) s a salvage value at the end of the period L0 ll inferiority gradient during the period 79 In a case with capital addition it must be remembered that if a defender is worth keeping at all, it usually has to be kept over the full period of additional service to distribute the cost of capital addition. Its adverse minimum would otherwise be much higher and it could probably not compete with the challenger. Challenger's Adverse Minimum. Salvage value, mostly not effective within 5 years and mostly less than 10 per cent of the initial cost, can for most cases in farmstead mechanization be neglected. The no salvage value formula for the Challenger's adverse minimum is (Derivation of the formula is shown in Appendix 11): ic - Challenger's adverse minimum = [/2 cg + 2 where: c : acquisition cost 9 = annual inferiority gradient i = interest rate It should be observed that because the formula is derived from a differentiation with respect to the number of years. it solves for the adverse minimum without knowing the expected service life. 80 Capital additions to the challenger, when being significant, can be taken into consideration, and will give a higher adverse minimum. If capital additions do not occur within the first five years, they must be of considerable size to affect the result to any extent (46). According to this, in this study it would not be necessary to consider capital additions. How the described technique can be used in making decisions about replacement will be shown by.the following example: ‘ A present dairy set up for 50 cows takes 2 men full time. A complete new set up which makes one man capable of handling 60 cows is planned and would cost $20,000. Power cost for the new set up is $100 per year higher than the old system. Net income above feed cost for every extra cow is $200 per year. Assume annual inferiority gradient for the system is $200 per year. Can the new’set up be justified and if so, how'much would be lost in keeping the old system for one more year? Solution: a. compute defender's adverse minimum Next year's operating advantage in dollars Challenger Defender Labor 3000 81 Challenger Defender Net from 10 cows 2000 Power cost IQQ_ I 5000 100 Net Challenger's advantage or defender's inferiority a $4900 No salvage value can be expected for the old buildings, thus there is no capital cost for keeping the old buildings. Defender's adverse minimum = $4900 b. compute Challenger's adverse minnmmm Using formula ic — 9 V2 cg + 2 gives V2 x 20,000 x 200 + 0°06 “22° °°° ' 0° = 3330 Challenger's adverse minimum 3 $3330. The solutions show that it is advantageous to adopt the new’system under the assumptions made and that not adopting the system'would lessen the possible income with 4900 - 3330 = $1570 for the next year. The exact solution for the challengers adverse minimum is shown in Appendix 12. Operating Inferiority Gradient. The most difficult of all estimates is the inferiority gradient. Trans- lation into service life is sometimes helpful to 82 realize its meaning. In the case where no salvage value is considered, the service life corresponding to a certain inferiority gradient is obtained if the inferior- ity gradient is divided into the adverse minimum.computed from the no salvage value formula. This is true because no addition is made for decreased salvage value for the last year, and operating inferiority is equal to adverse minimum, as in the example used here. The inferiority accumulated during a period of time divided by the number of years, consequently gives the annual gradient. In the example, the adverse minimum 3330 divided by the gradient 200 per year gives a corresponding service life of 16.6.years, or the same as found in the exact com- putation in Appendix 12. This shows perhaps more clearly that the assumption of $200 per year as inferiority gradient is reasonable. The order should be to compute corresponding service life from inferiority gradient. The replacement is often due to the inferiority to present systems, rather than deterioration and wear. An estimate of inferiority gradient from historic data is the best that can be done. If the development in an area (example, silage making: feed handling) or for a certain machine or equipment is followed closely 83 from year to year, and the best system or machine available at the present is measured (man hours per ton, ' man hours per cow) a picture of the inferiority gradient in the past is arrived at. From this, the future can be predicted, of course with probability involved, as always when dealing with the future. The technique would be the same and the justification as good for such computations as for determinations of trends, which are accepted and have been shown very useful in business and economics. Accuragy of the Shgrt Cut Formula. From the computations in Appendix 12 it is seen that the exact adverse minimum is 3220 against 3330 computed by the short cut formula, which means a deviation of around 3 per cent. It has been proven (46) that the deviation within the area of normal interest rates and for gradient cost ratio of l per cent or more, the deviation is less than 3 per cent, which, in many cases, is accurate enough to save the elaborate computations shown in Appen- dix 12. CHAPTER VII SUMMARY AND CONCLUSIONS MEX Today's commercialized farming is becoming more and more in common with industry as far as organization and management are concerned. The area of farm materials handling is becoming an important prOblem in farming, but is still an unorganized field. Industrial techniques and their possible application in analysis of materials handling on the farmstead are discussed in this thesis. An analytical approach is made from a functional as well as from a cost stand point. Analysis of the physical properties of the materials handling problem are centered around the influence of material, layout, and machinery. A physical unit to express the magnitude of a handling problem is discussed. weight, volume, and other properties of material are tried as appropriate units, considering the spec- ific characteristics of materials handled on the farm. In evaluation of layouts, distance is the main . property that is measurable, its significance in materials handling on the farmstead is evaluated. 85 Equipment and machinery are discussed from the standpoint of power requirement. The influence of unit load and distance on the performance of handling equip- ment is shown. A possible index to express the degree of mechanization is developed and an implementation chart classified according to degree of mechanization is made up. The cost analysis goes into the different com- ponents in handling cost and their relative importance in solving handling problems. Different techniques in cost computations and their influence on the results are compared. Data sheets for a detailed cost analysis are developed and an implement selection chart based on break-even analysis. A replacement theory and its possibilities and applications in the area of farm materials handling system is described. Cogclusiong Industrial materials handling analysis is usually worked as a traffic problem based on the following factors: 1. Unit loads of packaged or baled material 2. Speed of travel 3. Distances traveled 86 4. Scheduling and routing for handling equipment. 5. Distribution of storages with respect to the places where material'is used. Materials handling on the farmstead is not a problem of exactly the same nature as in industrial enterprises because: 1. Most of the material can be changed to fluidized form 2. Possibilities to eliminate handling are often present through self-feeding or other arrange- ments in the layout 3. Fixed equipment as conveyors, pneumatic systems, pipelines, are used to a great extent for the handling rather than fork trucks and tractors. For these reasons the analysis has been concentrated around the three factors: material, layout, and equipment. In materials the possibility to fluidize is of more importance than weight and volume, water being an example of a material with ideal handling characteristics. Layout planning is more a problem of proper arrangement to minimize the number of handling: and 87 .facilitate self-feeding or automatic feeding rather than‘ a problem.of minimizing distances. Versatility and structure characteristics, though difficult to measure, are very important factors. Flow diagrams and flow process charts are helpful in layout analysis. Equipment used generally has small power require- ments which in connection with the few hours of use per year makes the influence of power cost small. Trans- port tmme is often relatively small or negligible, transfer time in many cases being more important. An index of mechanization is developed for the purpose of comparison between systems. In general the physical properties of materials handling systems are difficult to measure. Some characteristics can be expressed in physical measures, but the only overall measure that works throughout a whole system is cost. The method used for computation of capital cost> becomes important when items with great differences in expected life are compared as is often the case for some equipment and structures on the farmstead. An appropriate capital recovery factor is recommended to use for such items. Added together with a factor for repairs, maintenance, taxes and insurance, an overhead cost factor 88 is arrived at which is convenient to use. The suggested data sheets can be used to work out costs for single machines as well as for a complete system. Appropriate replacement is essential to eventually eliminate obsolete methods. The method given is a more correct approach to replacement than is usually used, because it compares systems in use with the best.method available rather than an imperfect present stage. It also considers future inferiority for the system, that is best at the present. The inferiority gradient is difficult to specify at the present, but a continuous follow up on methods development would give a good background for estimates. The computational procedure for figuring cost is well established, the weak point in an analysis being the lack of standards and other information to use in the computations. In analysis for choice between systems the future is always a factor in one or several alternatives. Probability must necessarily be involved, and the future must be predicted from our knowledge at the present. Planning and analysis will never be simply a slide-rule job that anyone could do. The analytical 89 frame work that is used is a very important tool, but the results can not be expected to be more accurate than the data used in the calculations. With a careful choice of computational methods and careful selection of data, we still can get much further than with snap decisions or “hunching”. CHAPTER VIII RECOMMENDATIONS FOR FURTHER STUDIES To facilitate adequate planning of materials handling systems, systematic and continuous studies of methods are recommended to provide: 1. Reliable time standards for comparison of methods and systems 2. A continuous followbup on methods developments to give the inferiority gradient for replacement studies 3. A basis for determination of how different characteristics in materials, layout, and equipment affect the handling time and cost None of these suggested Studies are onedman research projects, but rather they should be pursued as cooperative projects at several universities and experiment stations, after standard methods have been established. Future work to simplify materials handling is most likely to be successful in the areas of: 1. Materials characteristics, e.g. fluidize materials 91 Layout planning to estimate handling, increase versatility and provide possibilities fer changes with changing technology Equipment design for complete systems considering the transfer from one operations stage in the handling to another. APPENDIX 93 APPENDIX 1 neon . muss-rs MAN unseen-mu mopsgnons 0:1er PM €10 _ Weighted Averages for Averages for Group Farms Handling the of Farms with Material Least Handling Time Baled Chopped Long- Bales Chopped Long- Loose Loose 1. Handling hay Unloading 0.23 0.20 0.78 0.21 0.17 0.45 Distribution in 0.27 0.15 0.56 0.10 0.00 0.56 storage Removal from 0.41 0.55 0.71 0.17 0.55 0.71 storage Moving from 0.35 0.38 0.41 0.27 0.00 0.41 Storage Feeding 0.51 0.46 0.53 0.00 0.00 0.5; Total 1.77 1.74 2.99 0.75 0.72 2.66 2. Handling bedding Unloading 0.28 0.26 0.37 0.23 0.19 0.25 Distribution in 0.27 0.28 0.17 0.24 0.21 0.00 storage Removal from 0.46 0.61 0.91 0.46 0.46 0.91 storage Moving from 0.54 0.49 0.58 0.53 0.33 0.58 storage Distribution in 1.49 0.92 1.50 1.40 0.9 1.5 stable Total 2.95 2.56 3.53 2.86 2.11 3.24 94 weighted Averages Vertical 3. Handling silage Unloading Distribution in silo Removal from silo Moving from silo Feeding Total 4. Handling manure (dairy) Removal from stable Transport to pile Loading into - spreader Total 5. Handling small grain Unloading Distritution in storage Silo .13 .11 .51 0.47 0.31 0.25 0.62 0.27 0.08 for Farms Handing thernaterial APPENDIX 1 (continued) Averages for Group of Farms with Least Handling Time Horizontal Vertical Horizontal Silo $110 $110 0.13 0.10 0.11 0.00 0.00 0.19 0.00 95 APPENDIX 1 (continued) Weighted Averages Averages for Group for Farms Handling of Farms with Least the Material Handling Time Removal from 0.50 0.00 storage Total 0.85 0.19 6. Grinding and handling ground feed Grinding and blending 0.77 0.65 Moving to feeding 0.49 0.00 area Feeding 1125 ' 9:99. Total 2.51 0.65 7. Handling concentrates Unloading 0.34 0.20 Distribution 0.16 0.00 Removal from storage 0.67 0.00 Total 1.17 0.20 96 APPENDIX 2 ENERGY REQQIREMENTS FOR WORK ON THE FARM walking, wearing boots, 3 mph on level Cal. per min. pavement 5.2 grassland 5.5 plowed land 7.0 Carrying a load of 50 lbs at 2.5 mph on level pavement on the shoulder 8.7 on the hip 9.5 in both arms across the abdomen 8.4 Walking upstairs, 100 steps per min 15.0 Pushing a feed cart on level firm ground pushing force 25 lbs 8.7 pushing force 30 lbs 10.3 Pushing force 35 lbs 11.7 Shoveling grain, shovel and load weigh 20 lbs Cycles per min 15 10 Throwing material horizontally 3 feet 7.5 5.5 6 feet x 10.2 7.2 10 feet 14.4 10.0 Throwing material vertically 3 feet 12.9 9.0 97 .APPENDIX 2 (continued) Cycles per-min lg 10 Throwing material vertically Throwing 7 feet 16.2 11.2 Farm.work with a tractor driving along road or track 2.7 using front end loader 5.5 Energy requirements can be estimated by adding to these figures values for basal metabolism, body posture or activity and activity of the limbs. Cal pr minute Basal metabolism 1.2 Posture sitting 0.3 standing 0.6 walking 2.0-3.0 climbing, per foot of rise 0.24 Activity of limbs Range Hand work, light 0.4 0.2-1.2 heavy 0.9 ,one arm, light 1.0 0.7-2.5 heavy 1.8 two arms, light 1.5 1.0-3.5 heavy 2.5 98 APPENDIX.2 (continued) Activity of limbs body and limbs, light moderate heavy very heavy 5.0 7.0 9.0 99 APPENDIX 3 MANUAL HANDLING TIME CHART (26) (tmme n TMU l TMU‘: 0.00001 man-hrs) J_F__i_____i___l _Tl Plane I Plane II Plane III weight Class Transfer Transfer Transfer Volume, cuft -2,0 2.1- 6.0: -2.0 2.14 6.1- .0 10.0 64503.0 A. Light, 172 196 280 242 265 350 260 280 365 25 lbs. 3. Medium, 210 230 314 280 300 380 300 320 400 25-50 lbs. C. Heavy, 270 295 350 340 365 420 360 380 440 50-75 lbs. the: When distance of transfer exceeds 4 ft add 17.0 TMU for each additional pace required in each direction. Plane I Transfer: Plane II Transfer: Plane III Transfer: Transfer on one level such as from floor. tO‘waist. No body bend required Transfer from one level to another such as from waist to floor, to waist. shoulder to shoulder or waist or floor Transfer from floor to shoulder level, or shoulder to floor level. Same as Plane II with sidestep and move added.. 100 APPENDIX 4 FLOW DIAGRAM. ’74 Half AMfi 5 m _ i- . .- 9e . 4--- smmwkewuui r _ n ,. . .. I’— _. \ ................... o .... J \ .alloLl ''''' .Loll Il.||.llo'..l.'.|l_. _’ ""||‘I||IL“'|'||""I'IIIIIL 0’ I _ , _ \I’. s L// a _ / \ . a . a a _ K O I I .z \ . x s s s s s s Ll i . . g ‘ . a GPA IN - STORAGE 5503 ms Coma/1V6 101 omeuoum 4 uses—95: O neoooum Av uncensored...” U BoHosm .m .m an oounommse mm maOAEhm a ré 3-3,. - z..- ET: , . I I _ 7-- e- 1.- - II t. , .i I . ,mwe.1 I- IIIe,- ;+I L .-: If I e iI it. I -I I II i I .Lfili +. II. I ...; I- . l ILII. i I I II. I .4. 4n. -.IiIriIl .I I I 4:1)-.iIiIIIIIII III .: .I--.Ii.IIIIIIIII-I I. I III e417) fiIl II III :II II.II-.. I. - i. i II. I. n A , . 409D .wOBI .nsmu .mssua Heuos Mums oomooq one Oh Bosh BzmzmHDom :1 emoq BHZD mmm Q40...— BHZD mum 940A BHZD Ego: Qz¢\m0 Dough: m 2 m A .95 24: ago: .BmHQ 1 e I I I I I I Insoaumauoeon ammmu ammoomm 30mm .22 I I I I I use» Hem metro: 0558‘ m van—"gum: I I I I I I II I I assesses so noses suns 102 maasoouImaom mcsemquuHom mcaoooMImaom Oduuaousd umdom venom umflom union consensus: uo>o>sou unseen uomo>sou wesoam nomo>soo wssoam nomo>coo possessoes Idadm monsoon ca soausnauu use: he Imam use ours uuomnsmua use: an masosoHsD mar coach .mcsascan sum .a use: me msaooom some use: me mssueou on msa>oz use: he omsuoun.souu-as>osem couuasauuuao use use: hm pompous our.“ pupae—Bun. can: an maaoaoacs Hesse: soaumwemo was mean .osaaocnr mam .H QZOHaflmflmO mzHanZ¢m «Oh BmHA_ZOHH .mceausms_omoaam .e uoao>sou Homo>coo womo>coo venom uo>o>coo uudOfl uOhOPGOU uo>e>coo soao>coo uouqssnoes OONdCflSUOS iHEUm Anusndufloov o Xanumm< use: as use: as use; me use: am one: as arduous menu meduoem on msd>oz pompous spun au>oeem. seasonauunau uso omsuouo once uuomnceus mcausoaso he: uemmono .mcaausen hum .m can: as use: as use: an Hesse: omnuOOM menu mcauoou on mca>oz omewoun scum Hs>oeem coaumuomo 104 u0h0>soo .uouomuu so sousod . souoeuImaom use usOHm .usss mm coupons sown Hs>osem upsca- .M0he>soo uszoam somm3 soaussauuedu use uousoass .sooz. u0h0>sou eweuoum ousd msd>oz some) ueuooass .soez usus he msausoHsD Odes asusouauos .msaausss sundae .m noueemxsse .somszuoom uses an usAuOOh wouoemxssm somszuDOh uses an sous mseuoom ou msa>oz soueOHss Oaam uses an emmuoum sown Hm>oeum peace: Hosea- soaussauunau use wo>o>soo wo>o>sou uses we possess cuss uuommsuun. usuasssooa OequOuss . usuasssooz Iaeem Houses. soaumuomo AQODGHUCOUV o NHn—Zflmmd somo>soo Homo>soo uomo>soo u0m0>soo somm3 usuMOHss .suo: 105 masoomMImswm msfiuoouluamm UdUMBQHDfl uome>soo scams scams Home>soo wo>o>soo uome>soo soups ueusoass .sooz uo>o>soo somebsoo .uouuouv so housed use usouh uOhe>sOO .muououuu so housOH use usoum usuasssuoa vengeance: Issue ADOSGADSOUV o NHQmemd uses ha can: so urns mm uses an onus he uses an Hesse: msauoom msfiusaum no msauoem o» uuommsuus pompous scum HMPOEOM soapssauunuu uss pompous cuss msa>ox msdumOHsD measures cause .e msauoem sown msauoou on msa>oz scuumuomo 106 Homobsoo .772: swan—om H23. saga—mm vaumeouss Hoso>soo Haho>soo Adda 0soum no Hana uQNdGM£OOS scans sown: uouasnnooa Iaamm usns an . msauOOh noun usns an msauoom ou msa>oz mswusuan 90\usm mswusauu madducdn 600% uSSOHG .5 Hussnz souuuuwmo Aumflsfiucoov m NHszmmd 107 APPENDIX 7 DBVIATIONS IN CAPITAL RECOVERY FACTORS COMPUTED IN DIFFERENT WAYS (Method 1 - 3 refers to the description in the text.(p.51) satin. lite Method 1 Method 2 Method 3 years 4% Int. CRP Dev. CRF Dev. CRP 5 0.2200 -2 0.2240 —0.3 0.22463 10 0.1200 -2.5 0.1220 -1 0.12329 15 0.0860 -4 0.0880 -2 0.08994 20 0.0700 -5 0.0710 -4 0.07358 50 0.0400 -14 0.0404 -13 0.04655 8%,Int. 5 0.2400 -4 0.2480 -1 0.25046 10 0.1400 -6 0.1440 -3 0.14903 15 0.1060 -9 0.1093 -7 0.11683 20 0.0900 -11 0.0920 -10 0.10185 50 0.0600 -27 0.0680 -17 0.08174 12% Int. 5 0.2600 -6 0.2720 -2 0.27741 10 0.1600 -10 0.1660 -6 0.17698 15 0.1260 ~14 0.1306 -11 0.14682 20 0.1100 ~18 0.1130 -16 0.13388 50 0.0800 -34 0.0812 -33 0.12042 usououm uuonuo: UH Bflflmm ¢H<fi m NHQZMNQ‘ . 23 anus 8H 2. 20mm gimme Eugmnmo zowlamwlmomllma: m2l lgup oz 82 . .322 829mg. 83828 .92 $588 .2: . 02382: .2282: r 2:32 A 56s 33.22 02592: m§m3§ uouomoum 109 my mam zoe mum am: 30325? 22253. .500 Soc .3 oz flog m2 55 «35 azmzmaoo monfi «023 290w! .mmmao [III‘ BmOU 924 QOflBmS 4 H Bflflflm (fidfi A uossflucoov m NHQZflmmd 110 .-Illdmmmmmm Ewan” a K49 MOBUGM Mmgooflm flan—"Q40 macaw macs .mmm . mums . «28» «an amp agogunfl .1Hmoo swans .322ng HH Bflgm 4349 m unHDZflmmd 111 w 208 mam BmOU AdBOB w Mdflfi mflm BmOU AflBOB w w amou amoo uom2s mason w BmOU 9‘”! ¢fl>O Adfilfid moaudh ndflmmflbo A¢§22¢ MOBQG 2 defi HH aflflflm 484G Aeoacuucou. m xnnzummc 112 ..-..- -..-.- mousmumuaogo 203292022222. 681.9 .VE .... 8.7T... SZZIT . 000000000 OOOOSOOSOSOQO SE TLC.- .......... ...... ...—... .. .. IGBLgstZT. 8970...; IS 2.1.19 .15 ...... WOOOOO 000 00.0n.v‘.3.w09 0 0 0. M i . _ - L -. 002.5: 22» 220 20328, 28203202 223202. 82 0292020229 92002 ...... a... 20212.9. 30.. 2.203229 . 293220 .2222: 92222 504 Ego ZOHBUBMm EgHDOM m NHQZMmm< 113 APPENDIX 10 MECHANIZATION PREFERENCE CHART OPERATION‘OR MACHINE ADDED COST $ PER YEAR A $ DECREASED COST $ PER YEAR P RETURN ON.ADDED MECHANIZATION F/A $/$ 114 APPENDIX 11 DERIVATION OF "NO SALVAGE VALUE FORMULA" FOR CHALLENGER'S ADVERSE MINIMUM Life average of operating inferiority and capital cost can be computed from the formula 9.13.2.1) +9.;_8_+;.LC_L21* 2 n 2 where g - annual inferiority gradient c - acquisition cost s 8 terminal salvage value n = number of years in service i 3 rate of interest in decimals If salvage value can be neglected the formula reduces to 2 n 2 Which expression if differentiated with respect to "n“ can be minimized, the ninimum.value being the adverse mini-um . 29. 12:9..230 nag dn 2 n2 If this value for ”n" is used in the original formula 911§§__:_l) + C JZE. + is 2 25 2 9 115 APPENDIX 11 (continued) which can be reduced to 10 - 3 V2 cg - 2 * More exact c - s (n + l) + 3 2 n 116 «Nun mmmm noon mmmm «mac mmmfi haam omoo Numb bmmOH OONHN HHHOB ovmm , «mm ouhm mom oumw mmh onmm mmu ommm umm once mou ovhu hum 008m own omen «ma oomoa hm ooudm o unou .uomsH .meo .uomo ommuo>¢ wag yumflglllllllofidu. hNH.o. ona.o hva.o HOH.O th.o nom.o hmn.o mmN.o whm.o mum.o coo.H nououh muo>ooom Hmuameo 00mm oamm odmu momm mmom mmNN mwma 0mm uam and o .uomsH .uomo omoa coca 0mm. hum was mos mam 05¢ 0mm aha 5.82 .8500‘ usenoum NH NHDZflde mo~m.o ummm.o mamm.o vbN©.o Hmoo.o Omah.o muvh.o Hmmh.o mamm.o oomm.o umum.o uouosh soups usonoum ZDSHZHSmemM>Q¢.mwMHZMHA<¢U ad DZH>HMM¢ MON mZOHfidfibmzco B OOON coma coma coed OONH oooa com 000 Dow CON .uomsH .uemo HA OH HMO? ‘ fine—«sue onuo>ue .. omeuo>e uonnsfius 08.3 Hessss 8255": e 117 ouNm Cuba Gama nmo.o mmuhd mmdd maam.o comm on «own coma Nous omo.o mmmoa omHH momm.o coon ma mmmm ovma mama «mo.o mooma mafia momm.o oovM ma ... ommm coma 0N2 30.0 :23 00.3” 33.0 comm S ova ommd omNA mmo.o HmuNH omHH mmmm.o ooom 0H comm 2.0m om: mode How: mm: 2.310 00mm ma mmNm OFHN mafia moa.o unwed omHH MN¢¢.0 coon ea momm ovum mmoa MHH.o omdm mNHH mmu¢.o ooum ma 00mm ommm com m: . 0 30m 30.. 03v. 0 00mm NH H309 peoo . nemsH nouoeh . newsn Houoeh . neo . homo ensue/0002 . sumo 5203 £0.33 . neusH 3% dB .33 3332 . 2000 .302 . 8:004 usoneum 80:50:00. 3 “892222 REFERENCES 1. 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