A Feasibility Study on Investing in the Extension of the Wheel Delivery Conveyor System at FMA Company Limited

Abstract

This study aimed to examine the parts delivery system in the final assembly process, as well as the technical and financial feasibility of installing a wheel conveyor extension. Primary data were collected through participatory observation and interviews with relevant stakeholders, while secondary data were obtained from academic literature and industry sources. Both qualitative and quantitative analyses were conducted, using financial tools that account for the time value of money as decision-making criteria. The results indicated that the current wheel conveyor system faces time and labor constraints, resulting in inefficiencies. To address these issues, the study recommends installing five sets of Interroll Series 3500 Heavy roller conveyor extensions, along with a pneumatic mechanical arm capable of lifting five wheels simultaneously, supporting a minimum load of 350 kilograms. The system is to be installed on a platform measuring 2 meters wide, 8 meters long, and 1.25 meters high, connected to the existing conveyor line via an X-lift mechanism. This installation is technically feasible and will not disrupt the main production line. The total investment amounts to 8,630,000 baht, with a weighted average cost of capital (WACC) of 7.43%. Financial analysis shows a Net Present Value (NPV) of 8,365,310 baht, an Internal Rate of Return (IRR) of 21%, a Modified Internal Rate of Return (MIRR) of 12%, and a Profitability Index (PI) of 1.96. The payback period is calculated at 4.53 years. Sensitivity analysis indicates that the project remains financially viable even if the returns from labor and welfare savings increase by up to 37.64%, and if investment and operating costs increase by 96.93% and 252.77%, respectively. In conclusion, the project is financially viable and carries a low investment risk.