(18C) Manufacturing Strategy Analysis

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extract from the Working with your Business Consultant Professional Calculator series,
Manufacturing Consultant …

formula
INVES=FRCST×(CURR-NEW-ADDIT)×USPV(I%:#PER)

where
INVES = initial ivestment required to make change
FRCST = periodic forecast or production volume
CURR = current manufacturing cost of each item
NEW = new manufacturing cost if change is made
ADDIT = any additional cost per item created by change
I% = interest rate per period as percent
#PER = number of perods to break even

It is sometimes necessary to make decisions regarding changes in
manufacturing location or manufacturing method. The formula above
can help evaluate a major change in manufacturing location or strategy..

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