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Capital Equipment Purchase and Cost/Benefit Analysis

Background:
This site, like all healthcare facilities in New York City, is being challenged to protect its

facility and residents from COVID-19. In efforts to reduce exposure to outsiders, and to secure

more supplies in case of food shortages, the Food and Nutrition department has decided to

increase the amount of food and supplies it has at the facility at all times. As a result, they need

to purchase more equipment that can facilitate the storage of more inventory. Major items of

interest include freezer and refrigeration units.

Generally, when the facility would like to purchase a piece of equipment, they must

coordinate with the foodservice director. The Food and Nutrition Department director ultimately

has executive decision on all purchases. All equipment under $10,000 is purchased in the

same manner. First the assessment of need for the equipment is analyzed. Since this site is short-

staffed, one of the main factors that is considered is whether the piece of equipment would

improve efficiency and productivity. Once the need has been determined, the Food and Nutrition

department workers begin to look at the Hubert catalog at specific pieces of equipment. All

equipment that is purchased for the kitchen must be stainless steel and must come with a service

and maintenance contract. Specifications of each item is analyzed to determine which item

would be best for their facility based on its specifications. For example, they look at the size of

the item, energy requirements, safety features, cost of the item etc.

After the specific model is picked out, it is sent to Sodexo, as they are in charge of the

food and nutrition contracts with New York City Health and Hospital Facilities. Sodexo then

finds bidders to bid on price quotes for the item and the maintenance contract. After they receive

bids from five bidders, the bids are reviewed and a bidder is chosen for the contract. The bids are
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reviewed based on price and reliability and reputability of the company chosen to deliver quality

goods and maintain them well and professionally. Next, a Notification of Unauthorized

Procurement Form needs to be filled out, and needs to be signed by the Vice President of

Sodexo’s purchasing department. In general, if a unit is being purchased to replace an old or

broken piece of equipment, Sodexo might request the depreciation of equipment. To calculate

the depreciation of the equipment, a “Replenish Form” must be filled out with all the

specifications and information of the broken or worn out unit. This form breaks down the

calculations to find depreciation (cost of purchase- residual value/ useful life).

Ordering:

Objective: The objective for purchasing a new 3 Door Reach-In Freezer is for the freezer

to maintain an internal temperature of between 0°F to -10°F, depending on what

temperature is it set to by the facility.3 

The Foodservice Department at this site is looking into a 3 Door Reach-In Freezer. Since

all models of freezers looked at displays the temperature digitally on the outside/front of the

freezer, they do not need to purchase add-in thermometers. Currently, the site primarily uses

walk in freezers for the majority of their frozen storage. However, they currently have four 2

Door Reach-in Freezers, which are all in use for any items that do not fit into the walk-in

freezers. They are looking to increase their inventory for certain items by 10% to minimize their

frequency of deliveries to minimize possible exposure of COVID-19, and to also have extra food

on site in case of possible food shortages. Therefore, the site is looking into purchasing an

additional freezer unit. The 3 Door Reach-In Top Mount Freezer by Turbo Air1 is an efficient

freezer system that keep food products at safe temperatures of between 0°F to -10°F, to maintain

safety and quality of food purchased. The total cost of the 3 Door Reach-In Top Mount Freezer
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by Turbo Air is $ 5,777.89; shipping and installation are free of charge. The specifications of this

particular item can be seen here:

Specifications:

Stock No. 19664

Brand Turbo Air
VPN M3F72-3-N
Case Pack 1
Material Stainless Steel
Finish Brushed
Secondary
Material Aluminum Inside Walls and Door Liner
Length 77.75"
Width 30.75"
Height 83"
Volume Capacity 65.8 Cu Ft

Size Allow 1-3/8" Space For Rear Condensate Enclosure

No. of Shelves 9
No. Doors 3
Door Style Solid
Temperature
Range Holds Temperatures from 0°F to -10°F
Volts 115Volts
Hz 60Hz
Phase 1
Amps 7.9
Compressor HP 1
Compressor
Location Top
Plug NEMA L14-20
Caster Detail 4" Swivel, 2 w/Locks
Shipping Free Shipping From Factory to Customer in the
Information Contiguous US.
Three Year Parts And Labor. Five Years on
Warranty Compressor
Certifications Energy Star, ETL (US & Canada), ETL Sanitation
Features Eco-Friendly
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Cost/Benefit Analysis and Financial Risk: 

The total cost of the 3 Door Reach-In Top Mount Freezer by Turbo Air is $ 5,777.89; shipping

and installation are free of charge. Though the cost of this piece of equipment is expensive, it is

needed for emergency relief. It is worth investing in an additional freezer unit to help minimize

deliveries and contact during the pandemic, and to help facilitate greater inventory storage to

prepare for possible food shortages. When looking for a new freezer, at this time, price was the

biggest factor. That is because the facility needs to channel a significant percentage of their

budget for other emergency equipment. Since the facility needs the freezer for maximum storage

with limited budget, they compared prices on all mobile freezers on the Hubert website. The

reason they only looked at freezers on wheels is because they need them to be adjustable for any

emergency need to reorient the space of their kitchen to make way for any potential future pieces

of equipment easily. When comparing all stainless-steel freezer units on wheels, the 3 Door

Reach-In Freezers offered the most amount of space for the best price.

The unit chosen can capacitate 65.8 cubic feet1. This unit was compared to the “True T-

72F-HC 72 cubic feet 3 Door Reach-In Swing Door” stock number “37929.”2 Even though the

True brand freezer has 6.2 more cubic feet of storage space, it cost much more per unit of cubic

storage space. Meanwhile, both units have the same voltage and would cost the facility the same

amount in utilities. The comparison can be seen in Table 1. The comparison of all specifications

of both freezers can be found in Table 2.

Table 1: Comparison of Different Units

Unit Turbo Air M3F72-3-N True T-72F-HC

Cost $5777.89 $6564.82
Cubic Feet 65.8 cubic feet 72 cubic feet
Cost Per Cubic foot $87.8 $91.2
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Table 2: Comparison of both Freezers

Price $5,777.89 $6,564.82

Material Stainless Steel Stainless Steel
Amps 7.9 14
Aluminum Inside Walls and Door
Secondary Material Anodized Aluminum ends, back and top
Liner
Case Pack 1 1
Volume Capacity 65.8 Cu Ft 72.0 Cu Ft
Three Year Parts And Labor. Five Three Year Parts And Labor, Seven Years
Warranty
Years on Compressor on Compressor
Stock No. 19664 37929
Brand Turbo Air TRUE
Height 83" 83.375"
Hz 60Hz 60Hz
Finish Brushed Brushed
No. Doors 3 3
No. of Shelves 9 9
Door Style Solid Solid
Compressor HP 1 4-Mar
Caster Detail 4" Swivel, 2 w/Locks 4" Swivel, 2 w/Locks
Plug NEMA L14-20 5-20P
Width 30.75" 29.5"
Phase 1 1
Length 77.75" 78.125"
Energy Star, ETL (US & Canada),
Certifications UL (US & Canada), UL EPH
ETL Sanitation
Volts 115Volts 115Volts
Holds Temperatures from 0°F
Temperature Range Maintains -10°F cabinet temperature
to -10°F
VPN M3F72-3-N T-72F-HC
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References: 

1. Hubert. Turbo Air 65.8 cu ft 3 Door Reach-In Top Mount Freezer- 77 3/4"L x 30 3/4"W

x 83"H Retrieved from: https://www.hubert.com/product/19664/Turbo-Air-M3F72-3-N-

658-cu-ft-3-Door-Reach-In-Top-Mount-Freezer---77-34L-x-30-34W-x-83H?

searchTerm=freezer

2. Hubert. Turbo Air 72 cu ft 3 Door Reach-In Swing Door -10°F Freezer - 78 1/8"L x 29

1/2"W x 83 3/8"H Retrieved from: https://www.hubert.com/product/37929/True-T-72F-

HC-72-cu-ft-3-Door-Reach-In-Swing-Door--10F-Freezer---78-18L-x-29-12W-x-83-38H

3. Payne-Palacio, J., & Theis, M. (2016). Foodservice Management: Principles

and Practices. Harlow: Pearson. Chapters 6 and 7.