Question 1

Why is total CAPEX more than the machine price?

Accepted Answer

The cash that leaves the business is the full cost from crate to first good unit. Integration and controls, freight, rigging, installation, facility modifications, safety guarding, training, spare parts, and a contingency all belong in the investment that payback needs to clear.

Question 2

Why include throughput value in the payback math?

Accepted Answer

Labor substitution is only part of the benefit. Where orders wait on capacity, incremental sellable cases carry contribution margin. A model that ignores throughput usually understates the return on the same machine.

Question 3

What does the cost-per-additional-case comparison show?

Accepted Answer

It compares two paths to the same capacity increase: automating the current cell or adding a second manual cell. Each option's annualized CAPEX and net annual operating cost are divided by the same incremental case count so the two can be judged on cost per shipped unit.

Question 4

What if the market cannot absorb more units?

Accepted Answer

Substitute the value of overtime avoided, third-shift elimination, or rental equipment avoided for the contribution margin figure. Constrain the model to the slowest process step if upstream supply or downstream operations gate the line.