T&M buying process made rational and justified Economically!

The economic justification for buying the testers (T&M equipment)involves several steps.Usually the idea is that the test time reduction will lead to increase in productivity,quality and profitability.Alongside good rational T&M purchase should accompany the cost reduction in manufacturing and maintenance of the system.For a manufacturing organisation,the Manufacturing yield,test coverage and yield effectiveness are to be accounted for.

While the costs are computed,onetime costs,ongoing costs and recurring costs are segregated.Tester Prices,Labour,Depreciation and Maintenance/Programming are the main heads covering all the three types.We have to add the three costs type together,we plug these numbers in our Criterian pre-decided and do the Economic Analysis.

Now comes the crucial point,where the Test Cost Per unit (or system under test:in manufacturing,or Project Environment)is computed for various Test vendors.The criterion can be based on the Payback Period,Net Present Value,or Rate of Return.Usually the Payback Period criterion is simple to apply.In Payback period method Depreciation and Taxes are not accounted.We can apply the other two methods,if the customer is corporate entity and avails the tax advantage due to deprecation:rapid,or straight line reduction.

The goal of this simple exercise is to apply the customers test strategy,or test system decision.The understanding of the T&M vendors have to be good,as far as the customer objectives go.The Test vendor can offer the better T&M Economic Solution if the understanding of the clients future is finer!It is T&M vendors ability to understand his Clients Business that should matter overall.

If anyone is interested in discussing any T&M Buying deal,or Proposal,he/she could contact the writer.+919810101238