Tissue360 - Fall/Winter 2016 - 38


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TEL +1-404-550-2573
hnanko@iti-america.com

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probability of failure that is used to make a
cost decision of whether stocking the part
is cheaper than the downtime cost of not
stocking it.
Once developed, the cost model requires
only the following data inputs to provide
the stock/non-stock answer:
1. Unit cost to purchase
2. MTBF in number of years
3. Number of running units.
STOCK EXAMPLE:
1. Unit cost to purchase = $16,567
2. MTBF in number of years = 8
3. Number of running units = 8.
In addition, we know:
* Time value of money (10 percent
interest rate)
* Probability of failure = 50 percent
* Probability of success = 50 percent
* Number of years for population to
reach 50 percent probability of failure =
1.52 years (Y+)
* Probability of NO failure in any one
year = .63446343
* Probability of failure in any one
year = .36553657
* The odds of failure in any one year =
1 to 2.735704392.
Note that not until "Y+" the time
elapsed does the population exceed a 50
percent probability of failure. Therefore,
the cost model is as follows:
C = Time value of money LESS the unit
cost of the part
C = $2,589 (Weighted cost to stock
the part)
Contribution of areas where the part is
to be spared ($888/ hr.):
Lead time = 3 days
Downtime cost = $63,936.
Should the part be stocked? YES
Lead time to not stock: 0.1 days
2.9 hours.
NON-STOCK EXAMPLE:
1. Unit cost to purchase = $14,000
2. MTBF in number of years = 61.8
3. Number of running units = 1.
In addition, we know:
* Time value of money (10 percent
interest rate)
* Probability of failure = 50 percent
* Probability of success = 50 percent
* Number of years for population to
reach 50 percent probability of failure =
61.8 years (Y+)

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Table of Contents for the Digital Edition of Tissue360 - Fall/Winter 2016

Setpoint
Tissue Industry News
PrimeService for Modern Tissue Machines
Making the Most of Opportunity in Tissue?
Reducing MRO Inventory Using RCM Principles
Vacuum Blower Saves 40-50 Percent Tissue Dewatering Costs
Tissue360 - Fall/Winter 2016 - cover1
Tissue360 - Fall/Winter 2016 - cover2
Tissue360 - Fall/Winter 2016 - 3
Tissue360 - Fall/Winter 2016 - 4
Tissue360 - Fall/Winter 2016 - 5
Tissue360 - Fall/Winter 2016 - Setpoint
Tissue360 - Fall/Winter 2016 - 7
Tissue360 - Fall/Winter 2016 - 8
Tissue360 - Fall/Winter 2016 - Tissue Industry News
Tissue360 - Fall/Winter 2016 - 10
Tissue360 - Fall/Winter 2016 - 11
Tissue360 - Fall/Winter 2016 - 12
Tissue360 - Fall/Winter 2016 - 13
Tissue360 - Fall/Winter 2016 - 14
Tissue360 - Fall/Winter 2016 - 15
Tissue360 - Fall/Winter 2016 - 16
Tissue360 - Fall/Winter 2016 - 17
Tissue360 - Fall/Winter 2016 - 18
Tissue360 - Fall/Winter 2016 - 19
Tissue360 - Fall/Winter 2016 - 20
Tissue360 - Fall/Winter 2016 - 21
Tissue360 - Fall/Winter 2016 - 22
Tissue360 - Fall/Winter 2016 - 23
Tissue360 - Fall/Winter 2016 - PrimeService for Modern Tissue Machines
Tissue360 - Fall/Winter 2016 - 25
Tissue360 - Fall/Winter 2016 - 26
Tissue360 - Fall/Winter 2016 - 27
Tissue360 - Fall/Winter 2016 - 28
Tissue360 - Fall/Winter 2016 - Making the Most of Opportunity in Tissue?
Tissue360 - Fall/Winter 2016 - 30
Tissue360 - Fall/Winter 2016 - 31
Tissue360 - Fall/Winter 2016 - 32
Tissue360 - Fall/Winter 2016 - 33
Tissue360 - Fall/Winter 2016 - 34
Tissue360 - Fall/Winter 2016 - Reducing MRO Inventory Using RCM Principles
Tissue360 - Fall/Winter 2016 - 36
Tissue360 - Fall/Winter 2016 - 37
Tissue360 - Fall/Winter 2016 - 38
Tissue360 - Fall/Winter 2016 - 39
Tissue360 - Fall/Winter 2016 - 40
Tissue360 - Fall/Winter 2016 - Vacuum Blower Saves 40-50 Percent Tissue Dewatering Costs
Tissue360 - Fall/Winter 2016 - 42
Tissue360 - Fall/Winter 2016 - cover3
Tissue360 - Fall/Winter 2016 - cover4
http://www.nxtbook.com/naylor/PPIB/PPIB0118
http://www.nxtbook.com/naylor/PPIB/PPIB0217
http://www.nxtbook.com/naylor/PPIB/PPIB0117
http://www.nxtbook.com/naylor/PPIB/PPIB0216
http://www.nxtbook.com/naylor/PPIB/PPIB0116
http://www.nxtbook.com/naylor/PPIB/PPIB0215
http://www.nxtbook.com/naylor/PPIB/PPIB0115
http://www.nxtbook.com/naylor/PPIB/PPIB0214
http://www.nxtbook.com/naylor/PPIB/PPIB0114
http://www.nxtbook.com/naylor/PPIB/PPIB0213
http://www.nxtbook.com/naylor/PPIB/PPIB0113
http://www.nxtbook.com/nxtbooks/naylor/PPIB0212
http://www.nxtbook.com/nxtbooks/naylor/PPIB0112
http://www.nxtbookMEDIA.com