Justifying the acquisition of automated equipment
Article Abstract:
Computer-aided design, computer-aided manufacturing (CAD-CAM) and flexible manufacturing systems (FMS) are being rapidly adopted by manufacturers. Methods used to justify acquisition of automated equipment differ from those used to justify purchase of conventional equipment. Conventional equipment tends to be purchased for specific applications, while automation equipment is often applied broadly to the manufacturing process. Performance capabilities of automated equipment are not as well known as the capabilities of conventional equipment, and the costs and benefits of automated equipment are harder to quantify. Five steps for justifying investments in automated equipment include: determining long-term, strategic company goals and the most appropriate manufacturing strategy; listing the expected costs and benefits of the new equipment; quantifying the costs and benefits that can be determined with some accuracy; calculating the internal rate of return or net present value of the quantifiable costs and benefits; and quantifying remaining benefits and costs of automation through probability analysis.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1987
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Accountants on the line
Article Abstract:
Management accountants learn important lessons from temporarily working in actual manufacturing sites. The hands-on experience exposes management accountants to the realities of production which enables them to understand the needs of the organization and make the appropriate decisions. For instance, accountants learn the importance of a particular equipment in the daily operations of the production facility that justifies the approval of the budget for the purchase of such equipment. Knowledge of the basics of shop floor duty also helps management accountants function better and enhance their job satisfaction. Moreover, the shop floor experience allows them to establish good rapport with ordinary workers, improving their interpersonal skills in the process.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1998
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AutoMan - decision support software
Article Abstract:
AutoMan is decision support software developed by Computer Aided Manufacturing International, the NIST Automated Manufacturing Research Facility, and the US Navy. AutoMan is a microcomputer system for evaluating automated manufacturing investments for the purpose of capital budgeting and measuring the alternative benefits of automation. AutoMan offers a model for evaluating the impacts of financial, nonfinancial quantitative, and qualitative factors on an investment decision. The system can incorporate all three impacts into an integrated analytic framework to simultaneously develop seven investment alternatives.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1989
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