Wilmington Tap and Die

Case Analysis

The general manager of Division A manufacturing taps and dies must decide whether to continue a major investment program. The program was developed to replace aging mechanical equipment with modern, electronically controlled devices. A post-audit after a first group was purchased from two machines and put into operation, showed that the actual sales was lower than in the capital expenditure request had been projected, and the operating costs were higher due to problems of adaptation to t. .. Read more »

The general manager of Division A manufacturing taps and dies must decide whether to continue a major investment program. The program was developed to replace aging mechanical equipment with modern, electronically controlled devices. A post-audit after a first group was purchased from two machines and put into operation, showed that the actual sales was lower than in the capital expenditure request had been projected, and the operating costs were higher due to problems of adaptation to the new technology. Analysis requires considering the intangible benefits of new investments in addition to the more easily quantified savings in labor costs.
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from
Robert S. Kaplan,
Glenn Bingham
Source: Harvard Business School
22 pages.
Release Date: 22 March 1985. Prod #: 185124-PDF-ENG
Wilmington taps HBR case solution