COST BENEFIT ANALYSIS FOR A CRISPS LINE

The cost of a complete line for crisps processing is presented below. The costs stated here cover washing/destoning, peeling, inspection (manual), cutting, blanching, frying, and salting (flavoring). The costs of packaging are notably high, and can reach 50% of the costs of the whole line. The continuous line where the product is moved in a continuous flow is recommended. Notwithstanding this, a consideration has been given to batch equipment where the batch peeler and fryer are manually fed. For a 100 kg/hour crisps line a snap cost benefit analysis can be undertaken. The figures for the calculation are based on new 100 kg/hour equipment and on data of processing factories, and average prices for crisps in Kenya.The 100kg/hour crisps line will generate revenue of USD 2,163,000. The total operating cost and depreciation stands at USD 941,030. Hence, a profit of USD 1,221,970 can be realized. This yields a benefit-cost ratio of 1.30. The implication of this ratio is that for every USD 1 invested in this 100kg/hour crisp processing line, an additional USD 0.30 is generated as profit after the USD 1 cost has been recovered. Therefore, it can be concluded that an investment in the 100kg/hour crisps line will be profitable in Kenya.