#Immediacy on speech making

The businessperson must decide whether or not to replace his old but ...

The businessperson must decide whether or not to replace his old but still usable machine with the new alternative. The reasons against replacement are often quite irrational and are expressed like this: 'There is plenty, of life left in the present machine; why waste money buying a new one?' the production manager; 'The present machine is not yet written off and has a website value of £1x' the company accountant; 'We can't afford more capital expenditure' a major shareholder.

Providing the new machine is more efficient, none of these statements is valid. Firstly, buying a more efficient machine is not likely to be a waste of money as the figures to be illustrated later. will show. Secondly, keeping the, machine until it is written off doesn't bring any money back nor does it provide money for a future purchase.

Lastly, you may not be able to afford not to make further capital expenditure especially if competitors are buying the more efficient equipment. Let us take an example.

Suppose a business uses a 3 year-old Magic Lathe which works well and cost £11 per unit of output to run. Along comes a sales person offering the Auto Lathe which, needing no human attention, costs 75p per unit of output to run. We paid £15,000 for our old lathe and the new one is offered at £16,000. The first step is to calculate how much we will save by using the new machine which completes each unit for 0.75p. Obviously we would save 0.25p per unit.

If we produce a total of 10,000 units per year we would save 10,000 25p £12,500, and at this rate we would 'get the money back' in just over two years.

After that, by using the Auto Lathe, we are making more money than we could have done with the Magic Lathe. The businessperson in this position must swallow his sadness at having to dig into his pocket so soon after the last time and take on the new machine. Keeping the old one until it is written off will not bring the money back but will make him / her uncompetitive with companies which opted for a new machine giving them a chance to reduce prices.

Sadly, many of the now-derelict factories in the Midlands were equipped with old machines some going back to the First World War and those businesses went under against the competition of well-equipped German, Japanese and American companies. Routine controls to save money Management must go to the trouble of keeping a close eye on a range of practices, however tiresome this may be, to prevent money leaking away.

The pressures of dealing with customers, the excitement of the impending stand ...

The pressures of dealing with customers, the excitement of the impending stand at the trade exhibition, and the tensions of negotiations with su... read more

Machines B and C =are starved of parts, or - ii. B ...

Machines B and C =are starved of parts, or - ii. B and C cannot keep up with A and A stands idle ... read more

As someone once said, 'Distribution is all about putting the product or ...

As someone once said, 'Distribution is all about putting the product or service where the customer wants it.' It is for this reason that building societies vie with each

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