Capital Equipment Purchasing: Optimizing the Total Cost of CapEx Sourcing (Professional Supply Management Book 2)

Capital equipment purchasing can significantly influence companies' economic success. However, in many companies the degree of professionalism of this particular form of procurement has not yet reached the required level. Likewise, from a scientific perspective, the topic leads more of a "shadowy existence". Compared to other main groups of procurement, capital equipment features numerous characteristics that significantly impact the purchasing process. The process of purchasing capital equipment therefore requires specific attention and above all a systematic approach. Due to these features, numerous challenges arise within the scope of capital equipment purchasing. To overcome these challenges, a holistic process model and specific tools and methods for capital equipment purchasing are presented. The following topics regarding capital equipment purchasing are presented: • Compliance management • Savings measurement • Life cycle costs and total cost of ownership • Determining the optimum useful life and replacement time • Real options approach for the evaluation of investment alternatives • Performance contracting Readers are provided with a comprehensive and structured process model for capital equipment purchasing. The comprehensive set of methods including various instruments and methods presented in this book support the establishment of a professional capital equipment purchasing process Front Matter....Pages 1-1 Introduction to Capital Equipment Purchasing....Pages 1-5 Characterisation of Capital Equipment....Pages 7-12 Characterisation of Capital Equipment Purchasing....Pages 13-17 Typical Challenges and Possible Solutions in the Procurement of Capital Equipment....Pages 19-21 Process for the Procurement of Capital Equipment....Pages 23-37 Instruments and Methods of Capital Equipment Purchasing in Terms of the Players Involved....Pages 39-65 Instruments and Methods of Capital Equipment Purchasing in Terms of the Characteristics of Procurement Objects....Pages 67-111 Overall Conclusions on Capital Equipment Purchasing....Pages 113-115 Back Matter....Pages 111-111 This book shows how to manage challenges in capital equipment purchasing. It contains a comprehensive set of tools with numerous instruments and methods for capital equipment purchasing. Includes numerous examples.