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Jeff Howell is a production manager at a metal fabricating plant. Last night he read an article about a new piece of Equipment that would
Jeff Howell is a production manager at a metal fabricating plant. Last night he read an article about a new piece of Equipment that would dramatically reduce his division's costs. Jeff was very excited about the prospect, and the first thing he did this morning was to bring the article to his supervisor. Nathan Peas, the plant manager. The following converstation occurred: Jeff: Nathan, I thought you would like to see this article on the new PDD1130; they've made some fatastic changes that could save us millions of dollars. Nathan: I appreciate your interest Jeff, but I actually have been aware of the new machine for two months. The problem is that we just bought a new machine last year. We spent $2 million on that machine, and it was supposed to last us 12 years. If we replace it now should our existing machine for a couple of years, and then when it becomes obvious that we have to have a new machine, I will make the proposal Instructions: Jeff just completed a course in managerila accounting, and he believes that Nathan is making a big mistake. Write a memo from Jeff to Nathan explaining Nathan's decision-making error
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