Solutions and Hints to the Applesoft Worksheets
Solutions to Applesoft Case Work
Solutions and Hints to the Applesoft Worksheets
Solution to Worksheet 10A:
Developing a Process Flow
Diagram
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Solution to Worksheet 10B:
Developing an Eco-map of
Water
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Solution to Worksheet 10B:
Developing an Eco-map of
Solid waste
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Solution to Worksheet 10C:
Developing the Material Balance
for Apples
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Solution to Worksheet 10C:
Developing the Material
Balance for Water
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Solution to Worksheet 10D: Conducting Cause Diagnosis for
Low Productivity
Fishbone Diagram
Handling
practices
need
improvement
Processes
exceed best
practice norms
Excess juice from
Blancher is
considered as waste
Management
Poor
Housekeeping
(leakages)
Skills on apple
sorting
and grading
to be upgraded
Maintenance
of nozzles
is inadequate
Nozzles are
inefficient
Cores and Peels
are disposed as
wastes
Materials
Staff needs
Training on
env. Impacts
of operations
Peeling m/c to
be improved.
Blancher could be
replaced
Machines
Solutions to Applesoft Case Work
Productivity
is low (about 72%)
Methods
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Solution to Worksheet 10E: Identifying and Screening Cleaner
Production Options
The options at the low or no cost end could include training of workers to do away
with sloppy handling, improving the maintenance of spray nozzles, sending the
organic waste as animal feed to the farmers..
Low to medium cost options could include replacing the spray nozzles with flat
nozzles; exploring reuse of water used to clean apples for floor washing, operating
the blancher by practice of holding to minimize steam requirements, using hot air
from the blancher for the purpose of drying, etc.
Medium to high investment options could include the recovery of sugar
supplement from waste, improving the peeling machine with spring loaded knives,
and replacing the original blancher with one having a higher product to steam ratio.
Solutions to Applesoft Case Work
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Option 1 : Sale of organic waste as cattle feed
All the solid wastes generated at the plant i.e., fruit peels, cores, spoilt / damaged fruit and the
packaging are presently dumped together along with the plastic, packaging wastes and broken
crates. Instead of co-disposing the organic waste with the inorganic packaging waste, the
company could sell the organic waste as cattle feed to the farmers.
Cost and benefit calculations
Income from the sale of organic waste
= (400 + 720) kg / day x 300 days x US$ 5 / 1000
= US$1,680
Savings due to reduced disposal of waste = (400 + 720) kg / day x 300 x US$ 10 / 1000
= US$3,360
Total savings
= US$ 5,040 /year
The environmental benefit of Option 1 will be reduced nuisance to the neighborhood
community and utilization of wastes.
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Option 2: Replacement of shower type nozzles with flat nozzles
The spray nozzles that are presently being used are shower-style and thus, very water-intensive.
By replacing them with flat nozzles, water will be conserved. This improvement will also
eliminate the manual washing practice (i.e. saving on time). Costs however will be incurred in
replacing the 25 shower style nozzles (15 on the conveyor-washing system and 10 for cooling the
blanched apples) with flat nozzles.
Cost and Benefit Calculations
Cost of flat nozzles
Replacement of all 25 nozzles
Maintenance costs
Volume of water saved by the new nozzles
= US$30 / nozzle
= US$ 750
= US$ 250 / year
= 40% x (40 + 10) m3 / day + 12.5 m3 / day
= 32.5 m3 saved / day = 9,750 m3 / year
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Option 2: Replacement of shower type nozzles with flat nozzles
Savings on water conservation = 9,750 m3 x US$ 0.2 / m3 x 1.2 (i.e. 20% anticipated
increase in water rate) / year
= US$ 2,340 / year
The wastewater volume will be reduced by 32.5 m3/day (i.e. the same as the volume of
water saved) = 9,750 m3/year
Savings on wastewater treatment
Total costs incurred in conserving water
Total annual savings
= 9,750 m3 / year x US$ 0.15 / m3
= US$ 1,462.50 / year
= Capital costs US$ 750 and annual costs of
US$ 250 / year.
= US$ (2,340 + 1,462.50) – US$
= US$ 3,802.50/ year
The payback on Option 2 is about 2.5 months and can be implemented immediately
since it requires only a small capital investment.
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Option 3: Use of high-grade spring mounted knives for apple peeling
Based on the brochure, the maximum peel loss will be 100 kg /ton. Hence, production will
increase as follows:
4000 kg – 400 kg ( spoilt and damaged apples)
= 3600 kg / day
Present loss of raw material in peels and core fleshings = 200 /1000 x 3600 = 720 kg
Net salable production
= 3600 kg – 720 kg = 2880 kg /day
After upgrading the peeling equipment:
Loss of raw material in peels and fleshings
Net salable production
= 100/1000 x 3600 = 360 kg
= 3600kg – 360 kg = 3,240 kg / day
The productivity will thus be close to 78%; closer to the target of 80% set by the company.
Incremental production
= 360 kg / day = 36 boxes /day
Incremental earnings
= 36 x 8 x 300 = US$ 86,400 / year
Cost of upgrading the peeling machine
= US$ 80,000
Payback period for Option 4 will be about 11 months.
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Solution to Worksheet 11: Preparing a Proposal for Demonstration Project
and For Securing Financial Assistance
Option 4: Recovery of the excess juice from blanching through concentration, for
use as a sugar supplement
The excess juice from the blanching process contains sugars and fine apple pieces. The
collected juice can be concentrated together with peelings and cores in a crusher-cumevaporator, and sold as a by-product to the food industry.
Apart from generating revenue due to the recovery of a by-product, the implementation of
Option 3 will result in substantial reduction in the BOD of the wastewater, thereby lowering
the wastewater treatment costs.
Costs incurred would be for the crusher-cum-evaporator equipment and working time. As
there is no present operating data available on this technology option, this project may be
considered as a demonstration project.
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Cost and Benefit Calculations: For screening the demonstration project, two
types of cost-benefit analyses could be done.
Optimistic scenario:
Cost of the crusher-cum-evaporator
= US$ 100,000
The amount of sugar supplement that can
be recovered per day
= (15% of 2000 kg from the juice) +
15%(40% of 720 kg from the peelings and
cores)
= 344 kg
Revenue generated per day
= 344 kg x US$ 0.6 / kg = US$ 206.8 / day
= US$ 61,920 / year
15% of the capital of the crusher-cumevaporator is the operational cost
= US$15,000
Net revenue generated per year
= US$ 61,920 – US$ 15,000 = US$ 46,920
The payback period will be
nearly 26 months.
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Pessimistic scenario:
Cost of the crusher-cum-evaporator
= US$ 120,000
The amount of sugar supplement that can
be recovered per day
= (10% of 2000 kg from the juice) +
10%(40% of 720 kg from the peelings and
cores)
= 228.8 kg
Revenue generated per day
= 228.8 kg x 0.5 = US$ 114.4 / day = US$
34,320 / year
15% of the capital of the crusher-cumevaporator is the operational cost
= US$18,000
Net revenue generated per year
= US$34,320 – US$18,000 = US$ 16,320
The payback period will be
nearly 88 months
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Net Present Value (NPV) for optimistic scenario
Cost of the crusher-cum-evaporator
100,000$
Effective life of the crusher-cum-
10 years
evaporator
Depreciation
10%
Net Annual Savings
=Revenue generated – (depreciation
cost +operating cost)
= 61920 – (10,000 +15,000) =
36920$
NPV
= -CFo+ CF1 + CF2 +…. CF10
(1+i)1 (1+i)2
(1+i)10
= -100,000 +36920 +…+36920
(1+8)1
(1+8)10
= 6496.33$
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Net Present Value (NPV) for pessimistic scenario
Cost of the crusher-cum-evaporator
120,000$
Effective life of the crusher-cum-
10 years
evaporator
Depreciation
10%
Net Annual Savings
=Revenue generated – (depreciation
cost +operating cost)
= 34320 – (10,000 +18,000) =
6320$
NPV for optimistic scenario
= -CFo+ CF1 + CF2 +…. CF10
(1+i)1 (1+i)2
(1+i)10
= -120,000 +6320 +…+6320
(1+8)1
(1+8)10
= 12543.33$
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Internal Rate of Return (IRR) for optimistic scenario
Cost of the crusher-cum-evaporator
100,000$
Effective life of the crusher-cum-evaporator
10 years
Depreciation
10%
Net Annual Savings
=Revenue generated – (depreciation cost
+operating cost)
= 61920 – (10,000 +15,000) = 36920$
IRR (solving for i)
0 = - CFo + CF1 + CF2 +…. CF10
(1+i)1 (1+i)2
(1+i)10
0 = -100,000 + 36920 +…+36920
(1+8)1
(1+8)10
= 58%
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Internal Rate of Return (IRR) for pessimistic scenario
Cost of the crusher-cum-evaporator
120,000$
Effective life of the crusher-cum-
10 years
evaporator
Depreciation
10%
Net Annual Savings
=Revenue generated – (depreciation
cost +operating cost)
= 34320 – (10,000 +18,000) =
6320$
IRR solving for i
= -CFo+ CF1 + CF2 +…. CF10
(1+i)1 (1+i)2
(1+i)10
= -120,000 +6320 +…+6320
(1+8)1
(1+8)10
= -12%
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Profitability Index (PI):
Profitability Index is the ratio of present value of future cash inflows by
present value of cash outlays
General Formula: PI = (PV of cash inflows)
(PV of cash outflows)
If PV <1 The project should be rejected
If PV >1 The project should be accepted
Calculations:
10
PV of cash inflows = 61920 ∑
1 = 7740
t=1 (1+0.08)
10
PV of cash inflows = 15000 ∑
1 = 1875
t=1 (1+0.08)
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Profitability Index (PI):
PI = 7740
1875
PI = 4.128
PI is more then one therefore the project can be accepted.
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No. Option title
Savings
made
(US $/year)
Payback
period
(months)
1
Sale of organic waste as cattle feed
5,040
-
2
Replacement of shower type nozzles with flat
nozzles - recommended for internal finance
3,802.5
2.5
3
Recovery of the excess juice from blanching 46,920
through concentration, for use as a sugar 16,320
supplement - recommended for demonstration
project
Optimistic scenario
Pessimistic scenario
26
88
4
Use of high-grade spring mounted knives for
apple peeling - recommended for external
finance
86,400
Solutions to Applesoft Case Work
11