Cumberland Metal Industries
The table below breaks down the economic value in use of the CMI pads according to both the Colerick and Fazio tests. I used the data from each case to derive the number of hours of driving required to complete the job with both the asbestos and CMI pads. The difference in time to complete the job multiplied by the cost per real hours was one part of the economic value in use. The other portion was the cost of the asbestos pads for each project.
Colerick Test
Feet driven 15000 Hours Cost per real hr($238) x total hrs
Asbestos 100 $23,800
CMI 75 $17,850
Difference 25 $5,950 Cost of pads 20 Sets @ $50 ea $1,000 Economic value in use $6,950 Per foot $0.46
Fazio Test
Feet driven 12000 Hours Cost per real hr($238) x total hrs
Asbestos 75 $17,850
CMI 60 $14,280
Difference 15 $3,570 Cost of pads 50 Sets @ $40 ea $2,000 Economic value in use $5,570 Per foot $0.46
The economic value that is created by use of the CMI pads is different in total dollars between the Colerick and Fazio tests. However, when you divide those values by the number of feet driven in each test you derive the same economic value in use of $0.46/ft. When you examine the breakdown of savings associated with a decrease in project time between the 2 tests you find that the Colerick test had a saving of $.40/ft, and Fazio $.30/ft. Where the total economic value becomes equal is in the number of pads used. This speaks greatly to the inconsistency of quality of pads that are manufactured. Though the Fazio test drove 300 fewer feet they used more than twice the number of pads. CMI is able to approach the distribution of their pads to the market in a manner different than that of the conventional channel because of the value that their pads create for the end user, the contractor. In the current state the pads are a commodity product manufactured by several small firms. The fragmentation of the distribution channel combined with the commodity nature of the product has put
Colerick Test
Feet driven 15000 Hours Cost per real hr($238) x total hrs
Asbestos 100 $23,800
CMI 75 $17,850
Difference 25 $5,950 Cost of pads 20 Sets @ $50 ea $1,000 Economic value in use $6,950 Per foot $0.46
Fazio Test
Feet driven 12000 Hours Cost per real hr($238) x total hrs
Asbestos 75 $17,850
CMI 60 $14,280
Difference 15 $3,570 Cost of pads 50 Sets @ $40 ea $2,000 Economic value in use $5,570 Per foot $0.46
The economic value that is created by use of the CMI pads is different in total dollars between the Colerick and Fazio tests. However, when you divide those values by the number of feet driven in each test you derive the same economic value in use of $0.46/ft. When you examine the breakdown of savings associated with a decrease in project time between the 2 tests you find that the Colerick test had a saving of $.40/ft, and Fazio $.30/ft. Where the total economic value becomes equal is in the number of pads used. This speaks greatly to the inconsistency of quality of pads that are manufactured. Though the Fazio test drove 300 fewer feet they used more than twice the number of pads. CMI is able to approach the distribution of their pads to the market in a manner different than that of the conventional channel because of the value that their pads create for the end user, the contractor. In the current state the pads are a commodity product manufactured by several small firms. The fragmentation of the distribution channel combined with the commodity nature of the product has put