NAME: BAILEY.A. CHARLES.

PROGRAM: CHEMICAL ENGINEERING.

MAT NUMBER: 13CF015127.
COURSE: CHE 431 ASSIGNMENT.

QUESTION 1.

A manufacturer provides a warranty against failure ofa

carbon steel product within the first 30 days after sale. 10
Out of 1000 sold were found to have failed by corrosion
during the warranty period. Total cost of replacement for
each failed product is approximately N1,200,000,
including the cost of environmental clean-up, loss of
product, downtime, repair, and replacement.
a.) Calculate the risk of failure by corrosion, in Naira
b.)If a corrosion-resistant alloy would prevent failure by
corrosion, is an incremental cost of N1200 to manfacture
the product using such an alloy justified?What would be
the maximum incremental cost that would be justified in
using an alloy that would prevent failures by corrosion?

Solution

)Recall, risk managemanet R=PC where P=probability of

occurence and C= consequence
Probability=required outcome/total outcome, therefore
10/1000=0.01
Consequence(in monetary terms)= N1,200,000
Risk =0.01 N1,200,000=N12,000
Assuming all 10 products fail, the risk of failure would
amount to 10 N12,000= N120,000.

Since incremental cost is less than the consequence

.N1,200 per product-incremental cost is justified (exactly
10% of the consequence) incured from possible failure by
corrosion of a single product.
The total cost for the alloy per product is
12001000=N1,200,000.
Hence, the maximum incremental cost to prevent failure
is N1,200,000.

QUESTION 2.

Linings of tanks can fail because of salt contamination of

the surface that remains after the surface is prepared for
the application of the lining. Between 15% and 80% of
coating failures have been attributed to residual salt
contamination. The cost of reworking a failed lining of a
specific tank has been estimated at N9,000,000.
a.)Calculate the risk due to this type of failure assuming
that 20% of failures are caused by residual salt
contamination.
b.)If the cost of testing and removal of contaminating
salts is N450,000 is this additional cost justied based on
the risk calculation in (a)
c.)Calculate the minimum percentage of failures caused
by residual salt contamination at which the additional
cost of N450,000 for testing and removal is justified.
A.

Recall probability = required outcome/ total possible

outcome
Given data
20% of the failures are caused by residual salt
contamination
The probability of the salt contamination is 20/100=
0.2%.
The consequence of reworking a failed tank is
N9,000,000.

The risk=ProbabilityConsequence=
20/100N9,000,000=N1,800,000
B.

Since the Risk of failure per unit is N1,800,000 , and the

cost of removal or testing is N450,000 , therefore it is
justified.(incremental cost is less than the consequence)
This is justified because it would cost less to remove the
contamiation than it would to incure the risk of failure.

C.

Minimum risk =?
To calculate the minimum risk we need to know what
percentage of N9,000,000 is N450,000.
Let the minimum risk be =x
Hence , X/100 0f N9,000,000= N450,000
N9000,000X/100= N450,000
9X=45
X= 45/9
X= 5%
Hence, the minimum percentage of failures caused by
residual salt contamination at which the additional cost of
N450,000 for testing and removal is justified is 5%.