MACHINE REPLACEMENT FOR THE SHOP MANAGER.
By Baxter T. Fullerton '36. Cleveland, Ohio: Huebner Publications, Inc., 1961. $4.00.
This small hardcover book of eight chapters is worth a fortune to businesses that practice its principles. In it the author applies investment theory to sales and purchasing functions, based on the fact that the increased productivity of the proposed machine will recover the investment (represented by the extra cost of the purchase) with an attractive return.
The book is an example of the emphasis in modern management on decision making, much of which concerns the improvement of operations by investment in new technologies - from machine tools to computers.
The preface says the book is "written specifically for the shop operating man" to guide his replacement decisions. Tables in the book permit him to compute the rate of return on the proposed capital expenditure without having to set up the investment equations of costs and savings.
Among the advantages of the book to the shop manager is Mr. Fullerton's explanation of the factors behind his replacement formula which govern top management in approving spending decisions. The book does not give the mathematical models for the various investment situations, on the basis that these models and the complex considerations for setting them up are the problems of higher echelons in engineering and finance. This reviewer agrees that such contents would probably detract from the value of this book for shop managers by placing it beyond their functional need and comprehension:
In all, the book is well planned. But Mr. Fullerton is to be complimented on still another score. Here is a sales executive (he is Director of Marketing Services of the Warner and Swasey Company) who believes that a salesman need not be a mere ordertaker but can create sales based on the value of his product to his purchasers, and then sets out to do it by the quantitative method of evaluating the rate of return on the purchase.
As ably stated by Howard A. Squires, chief industrial engineer of Bucyrus Erie Company, in the preface of the book, "Modern plant and equipment, effectively used, can make the difference between life or death in today's competitive struggle for domestic and world markets."
