Ceramic Arts Inc. manufactures ceramic floor tiles, in both natural hues (where the colour is determined by inputs used) and stamped tiles (where pattern in colour is printed on the tile). It has decided to automate its stamping process, which to date has been manual. Computerized robotics will stamp the various designs on the tiles as well as apply the final coatings. This should result in lower overall costs and ensure the stamp is evenly applied each time (previously, "mis-stamps" had to be destroyed or sold at deep discounts).

The company is in the process of preparing a capital budget analysis for this robotic upgrade and has calculated a positive net present value for the project.

 

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You currently work as a financial analyst for Ceramic Arts Inc. Your boss has asked you to provide a list of risks that should also be considered as part of the qualitative assessment of this project.

Answer rating: 100% (QA)

Technical risks failure of the robotic equipment leading to downtime high maintenance costs compatib... View the full answer