To reduce the threat of entry in the manufacturing industry, should you invest in highly specialized production equipment with no resale value, or general purpose equipment that can be resold at cost? Assume production costs are equal once installed.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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To reduce the threat of entry in the manufacturing industry, should you invest in highly specialized production equipment with no resale value, or general purpose equipment that can be resold at cost? Assume production costs are equal once installed. 

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Advantage of highly specialized production equipment: This type is equipment is specialized in the process and helps the workers in productivity.

1.increase productivity: if the equipment used in manufacturing is highly specialized, it will increase productivity in production. of the product.

2.Quality product. the highly specialized equipment will have the specialization of producing the specific product so it helps in making the quality product. 

 3.No maintenance: A new equipment will have a low maintenance cost in the starting that can help in producing good quantity and quality product will not extra cost of maintaining the equipment.

4. Smooth production: The new equipment will help in the smooth production as there is no distraction in the process.

 

 

 

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