Apparel‐manufacturing Capital Investment Adviser

Apparel firms have been discouraged from investing in advanced manufacturing technology because it is difficult to justify. To help to resolve this problem, members of the Clemson Apparel Research group have designed a personal computer‐based system specifically to provide decision support to apparel firms which are considering the acquisition of new equipment. Describes the Apparel Manufacturing Capital Investment Adviser (AMCIA) system which includes worksheets which help to quantify cash flows typically associated with apparel‐manufacturing technology. In addition to “traditional” cash flows (those which are normally considered), the system accounts for two “non‐traditional” cash flows which are often overlooked in justifications: quality revenues and response‐time revenues. Results in a summary sheet which provides decision criteria for the overall investment: net present value (NPV), pay‐back, and return on investment (ROI). Reports a field study involving justification of unit production systems, which showed that the AMCIA system was well suited to analysing such an investment. Representatives of the two participating apparel companies each reviewed the AMCIA justification prepared for their firm and were favourably impressed by it.