Solutions to Applesoft Case Work 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

Solutions to Applesoft Case Work Solutions and Hints to the Applesoft Worksheets Solution to Worksheet 10B: Developing an Eco-map of Water

Solutions to Applesoft Case Work Solution to Worksheet 10B: Developing an Eco-map of Solid waste Solutions and Hints to the Applesoft Worksheets

Solutions to Applesoft Case Work Solution to Worksheet 10C: Developing the Material Balance for Apples Solutions and Hints to the Applesoft Worksheets

Solutions to Applesoft Case Work Solutions and Hints to the Applesoft Worksheets Solution to Worksheet 10C: Developing the Material Balance for Water

Solutions to Applesoft Case Work Solutions and Hints to the Applesoft Worksheets Solution to Worksheet 10D: Conducting Cause Diagnosis for Low Productivity

Solutions to Applesoft Case Work Solution to Worksheet 10E: Identifying and Screening Cleaner Production Options Solutions and Hints to the Applesoft Worksheets 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 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 = ( ) kg / day x 300 days x US$ 5 / 1000 = US$1,680 Savings due to reduced disposal of waste = ( ) kg / day x 300 x US$ 10 / 1000 = US$3,360 Total savings = US$ 5,040 /year Option 1 : Sale of organic waste as cattle feed Solutions and Hints to the Applesoft Worksheets The environmental benefit of Option 1 will be reduced nuisance to the neighborhood community and utilization of wastes.

Solutions to Applesoft Case Work Solutions and Hints to the Applesoft Worksheets 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= US$30 / nozzle Replacement of all 25 nozzles = US$ 750 Maintenance costs= US$ 250 / year Volume of water saved by the new nozzles= 40% x ( ) m 3 / day m 3 / day = 32.5 m 3 saved / day = 9,750 m 3 / year

Solutions to Applesoft Case Work 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 = 9,750 m3 / year x US$ 0.15 / m3 = US$ 1, / year Total costs incurred in conserving water = Capital costs US$ 750 and annual costs of US$ 250 / year. = US$ (2, ,462.50) – US$ Total annual savings = 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. Solutions and Hints to the Applesoft Worksheets Option 2: Replacement of shower type nozzles with flat nozzles

Solutions to Applesoft Case Work Solutions and Hints to the Applesoft Worksheets 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 = 100/1000 x 3600 = 360 kg Net salable production = 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. Option 3: Use of high-grade spring mounted knives for apple peeling

Solutions to Applesoft Case Work Solution to Worksheet 11: Preparing a Proposal for Demonstration Project and For Securing Financial Assistance Solutions and Hints to the Applesoft Worksheets 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-cum- evaporator, 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.

Solutions to Applesoft Case Work Cost and Benefit Calculations: For screening the demonstration project, two types of cost-benefit analyses could be done. Optimistic scenario: Solutions and Hints to the Applesoft Worksheets 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$ / day = US$ 61,920 / year 15% of the capital of the crusher-cum- evaporator 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 benearly 26 months.

Solutions to Applesoft Case Work 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) = kg Revenue generated per day= kg x 0.5 = US$ / day = US$ 34,320 / year 15% of the capital of the crusher-cum- evaporator 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 benearly 88 months Solutions and Hints to the Applesoft Worksheets

Solutions to Applesoft Case Work Solutions and Hints to the Applesoft Worksheets Net Present Value (NPV) for optimistic scenario Cost of the crusher-cum-evaporator 100,000$ Effective life of the crusher-cum- evaporator 10 years Depreciation10% Net Annual Savings=Revenue generated – (depreciation cost +operating cost) = – (10, ,000) = 36920$ NPV= -CF o + CF 1 + CF 2 +…. CF 10 (1+i) 1 (1+i) 2 (1+i) 10 = -100, … (1+8) 1 (1+8) 10 = $

Solutions to Applesoft Case Work Solutions and Hints to the Applesoft Worksheets Cost of the crusher-cum-evaporator 120,000$ Effective life of the crusher-cum- evaporator 10 years Depreciation10% Net Annual Savings=Revenue generated – (depreciation cost +operating cost) = – (10, ,000) = 6320$ NPV for optimistic scenario= -CF o + CF 1 + CF 2 +…. CF 10 (1+i) 1 (1+i) 2 (1+i) 10 = -120, …+6320 (1+8) 1 (1+8) 10 = $ Net Present Value (NPV) for pessimistic scenario

Solutions to Applesoft Case Work Solutions and Hints to the Applesoft Worksheets 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 Depreciation10% Net Annual Savings=Revenue generated – (depreciation cost +operating cost) = – (10, ,000) = 36920$ IRR (solving for i)0 = - CF o + CF 1 + CF 2 +…. CF 10 (1+i) 1 (1+i) 2 (1+i) 10 0 = -100, … (1+8) 1 (1+8) 10 = 58%

Solutions to Applesoft Case Work Solutions and Hints to the Applesoft Worksheets Internal Rate of Return (IRR) for pessimistic scenario Cost of the crusher-cum-evaporator 120,000$ Effective life of the crusher-cum- evaporator 10 years Depreciation10% Net Annual Savings=Revenue generated – (depreciation cost +operating cost) = – (10, ,000) = 6320$ IRR solving for i= -CF o + CF 1 + CF 2 +…. CF 10 (1+i) 1 (1+i) 2 (1+i) 10 = -120, …+6320 (1+8) 1 (1+8) 10 = -12%

Solutions to Applesoft Case Work Solutions and Hints to the Applesoft Worksheets 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 = ∑ 1 = 7740 t=1 (1+0.08) 10 PV of cash inflows = ∑ 1 = 1875 t=1 (1+0.08)

Solutions to Applesoft Case Work Solutions and Hints to the Applesoft Worksheets Profitability Index (PI): PI = PI = PI is more then one therefore the project can be accepted.

Solutions to Applesoft Case Work Solutions and Hints to the Applesoft Worksheets No.Option titleSavings made (US $/year) Payback period (months) 1Sale of organic waste as cattle feed5,040- 2Replacement of shower type nozzles with flat nozzles - recommended for internal finance 3, Recovery of the excess juice from blanching through concentration, for use as a sugar supplement - recommended for demonstration project  Optimistic scenario  Pessimistic scenario 46,920 16, Use of high-grade spring mounted knives for apple peeling - recommended for external finance 86,40011