Computation Section
Investment Economics
 -Compare Multiple Projects

This option compares two or more projects.

Before comparison is possible at least two projects must already reside in the current workbook.



We illustrate this option with an example.

A product has a selling price of $100 per unit. Three manufacturing processes can be used to make it. The processes have cost characteristics as shown below. The First Cost is the investment required to initially setup the production process. The Unit Cost is the cost of manufacturing one unit of product. The Life is the number of years the process will operate before replacement is required. All have 0 salvage value. The MARR is 15%.

First Cost
Unit Cost
30 years
Machine Tool
3 years
5 years

The three projects are defined using the Add Project command and appear on the worksheet as below. The repetition and MARR cells have been filled by the Compare Multiple portion of the add-in.


  To compare the three projects, we choose Compare Multiple option from the menu, we obtain this dialog.

The dialog is similar to the Compare Projects dialog except only one list is provided showing all the projects in the workbook. Holding the shift key allows the selection of multiple projects. No cash flow is provided with this option. The Auto project is at the top of the list and does not show in this display.

Clicking the OK button generates the worksheet display below. The yellow cells indicate that this is a dynamic display. Changing the MARR or data associated with the projects immediately changes the display and perhaps the selection of the best alternative. When the display is not dynamic, the affected cells hold numbers rather than formulas, and data changes are not reflected. Only one dynamic comparison is valid for any given project.

  The figure below shows the comparison when the MARR is changed to 8%. With the reduction in the cost of capital, the Automatic option is the best.
  The multiple comparison option does not allow cash flow or graphical display.
Return to Top

tree roots

Operations Management / Industrial Engineering
by Paul A. Jensen
Copyright 2004 - All rights reserved

Next Page