Introduction
Some costs and savings are hard to put a number on. Other factors are almost impossible to put a number on. You must still consider them in the economic analysis.
Indirect costs and savings
These factors are difficult to evaluate, but they can have a value. Examples are:
- inventory savings
- scrap savings
- reduced downtime
Their values can be large enough to change a marginal project into one with a rate of return much larger than the MARR.
Factors that are almost impossible to quantify
- Safety: the robot removes human operators from dangerous work
- Less dependence on direct labour: fewer personnel problems
- Better customer relations: better delivery schedules and better quality
- Showplace: the automated factory can impress customers and possible customers
- Production flexibility: some robot cells can adapt easily to changes in the product mix
The company cannot change these factors into costs and savings. But the company must include them in its general strategy for robotics and automation.