Economic analysis of the production of ready-to-eat ` Gbegiri' bean mix powder

Abstract

Economic evaluation of the industrial production of Gbegiri bean soup mix was conducted using the NPV (net present value) and IRR (internal rate of return) methods. A uniform cash flow over a 10-year plant life with zero salvage value was assumed. Sensitivity analysis was conducted by varying the number of production days (330, 250 and 150 days) at 100% plant capacity and varying the plant capacity (100, 85 and 70%) for a 330-day production schedule. Some components of the operating cost reduced as the number of production days or the plant capacity were reduced. The production cost and product cost per unit increased with reduction in either the plant capacity utilisation or the number of days. The economic performance of the plant when operated for 150 days was not attractive. The results indicated that the plant should not be operated for less than 250 days in the year. Flexibility in the plant capacity utilisation in the range 70–100% yields a good economic performance.