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Chapter 11-Profitability (eChapter)

Author(s)/Editor(s): Charles L Caristan, PhD
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Published: 08/14/2003
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For end-users, profitability is driven by sales and hinges on the bottom-line cost of operations, including investments in equipment, facilities, supplies, utilities, material, labor, preventive maintenance, and repair. The following sections attempt to break down and itemize principal cost considerations in the profitability equation. These considerations can be used, regardless of the company, as a basis to build a business case or identify areas for improvement. Business cases differ specifically from company to company due to differences in accounting methods and labor structure, levels of automation, environmental laws, and tax laws. This chapter will focus only on equipment procurement, maintenance and repair cost, and utility costs for electricity, gas, water, compressed air, telecommunications, and scrap and waste costs.