This series of posts will be on financial concepts and
strategies. Forecasting equipment needs or replacement is a good financial
practice. Make a list of planned purchases. Consider alternatives to paying
full price. Will newer, used equipment suffice or is repair a more cost-effective
option than replacement? Conduct a
cost-benefit analysis. Make a list advantages on one side of the page and
disadvantages on the other side.
Examples of advantages include: Disadvantages
may include:
Higher visibility Paying
an additional salary, hence higher cost
Faster production Cost
of training for new equipmentIncreased efficiency Less human interaction with customers
Compare the advantages of making one purchase over
another. Prioritize according to
operational importance and cost. Place planned purchases on a five, ten and
fifteen year timeline. Establish a sinking fund to pay it forward
by saving in equal installments. Make sure to index for inflation. The next
post will be on highest and best use of resources.
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