COMPASS: A Software Tool for Equipment Acquisition Decision Making in the Apparel Industry

Describes COMPASS, which was developed under the Apparel Manufacturing Technology Center (funded by the US Defense Logistics Agency) to assist the apparel industry in evaluating the viability of new equipment. The need for a product such as COMPASS was previously defined through a survey of equipment acquisition decision methods used by manufacturing, with emphasis on the apparel industry. This research, combined with other research results, concluded that current practices could be improved in several key ways. First, the payback criterion was used often inappropriately as a measure of investment viability rather than a measure of risk. Second, the use of net present value as a decision criterion, while superior to payback, was itself deficient in practice. COMPASS was designed to address these deficiencies by including benefits not previously quantified (thus correcting analyses previously biased against adoption of new technologies), and by recognizing that it will never be possible to quantify all the benefits, to offer an alternative, non‐traditional, and qualitatively based decision‐making procedure.