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GATE Mechanical Engineering (ME) 2020 Shift 1 Solved Paper

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Question : 65 of 65

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Consider two cases as below.

Case 1 : A company buys 1000 pieces per year of a certain part form vendor ‘X’. The changeover time is 2 hours and the price is Rs. 10 per piece. The holding cost rate per part is 10% per year.

Case 2: For the same part, another vendor ‘Y’ offers a design where the changeover time is 6 minutes, with a price of Rs. 5 per piece, and holding cost rate per part of 100% per year. The order size is 800 pieces per year from ‘X’ and 200 pieces per year from ‘Y’. Assume the cost of downtime as Rs. 200 per hour. The percentage reduction in the annual cost for Case 2, as compared to Case 1 is _______ (round off to 2 decimal places).

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