CAVS Publication Abstract

Evaluating the Justification of Captial Equipment: A Factory Physics Perspective

Walden, C., & Bullington, S. (2001). Evaluating the Justification of Captial Equipment: A Factory Physics Perspective. Proceedings of the 10th Annual Industrial Engineering Research Conference. Dallas, Texas: Institute of Industrial Engineers.

Abstract

A framework is developed for evaluating the justification of capital equipment in manufacturing environments where traditional approaches fail to document actual benefits. Our investigation gives primary consideration to the value of intangible benefits and their impact on cycle-time, customer service and lost sales profit. These benefits are often not quantified economically, which frequently results in poor investment decisions.