NCIC: A software tool for capital investment analysis in manufacturing

Abstract

The strategic benefits of advanced manufacturing technology are hard to quantify, making it uncertain how to include them in the capital investment justification process. This has led to the adoption of multi-criteria techniques in which direct cost savings is but one of several criteria used to evaluate investment alternatives. NCIC (non-traditional capital investment criteria) is a software tool developed by the authors that facilitates the incorporation of difficult-to-quantify benefits and costs into capital budgeting. It combines a framework for clarifying non-traditional criteria with a procedure for subjectively assessing criteria merit in dollar terms. Their values can then be incorporated in a conventional present worth analysis. In this article we describe the NCIC methodology, the software architecture, and user screens. A case study in justifying advanced manufacturing technology using NCIC is also described.