Calculating the Costs of Robot Systems

Most companies no matter how large or small, have some form of cost justification associated with the purchase of new capital equipment. This justification procedure can be anything from a few hand written notes to complete and detailed cost - benefit analysis.

Capital Expenditure Appropriation

This represents the funds available for new capital expenditure during the budget period. If we assume that investment in robotisation is being considered, a three part analysis is required which will allow us to determine the profitability of the total initial investment.
  1. Determine the investment required
  2. Measure the effect of the investment on operations, costs, and profitability.
  3. Calculate the return in relation to the required investment

Calculating the Payback Time On the Basis of Time

When capital equipment has been purchased a major consideration is the payback time. The following example demonstrates a simple method of determining the payback period of a robot based on time.

Cost of robot -------------------------------------------------------------27,000
Labour replacement cost --------------------------------------------10,000
Maintenance cost for one operative ------------------------------1,500
Maintenance cost for two operatives -----------------------------2,500

For one operative:
The payback time (P) is the cost of the robot divided by the labour cost, minus the maintenance.
For two operatives: