Peerless may not be able to attract enough business

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marketing techniques, and will draw new and different competition.Peerless may not be able to attract enough business to keep the system productive.The potential benefit is, of course, a new large market to successfully apply Peerless’slaser cutting experience. A significant strategic variable that Peerless should consider is
the long-term viability of the saw blade market. The success of laser cutting (as Peerlesshas experienced) and other technologies has the potential to reduce the overall market formechanical cutting devices over the long term.3.The following steps are needed to estimate the payback: 1) Estimate the amount of laser cutting needed using a 14” saw blade as a typical product.The blade would have approximately a 44” circumference. Doubling this amount to accountfor teeth and adding 9” for the arbor gives approximately 97” of linear cutting distancerequired to manufacture the blade. 2) Based on the cutting speed of 40”/minute, the cutting would take 2.4 minutes. Addingtime to handle the blade, and maintain the workstation, estimate the total time at 3 min/blade.3) Exhibit 3 estimates the operating cost of a 1200 watt laser at $.10/min, making thelaser’s portion of the blade cost $.30/blade; not a particularly significant amount for a $25blade. 4) Exhibit 3 estimates the cost of the laser to be about $200,000. Assume an additional$100,000 for computers and training bringing the total to $300,000.

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