biomass buner af

  • Created by: geogt002
  • Created on: 06-06-16 11:23
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  • buying a biomass burner
    • benefits
      • it will cut costs by 10,000 pounds per year. this will help to make af profitable again however given that egerton (1 product line) made a loss of 12,000 pounds they will need more than the biomass burner to make profit- 2k more.
      • it is ethical. this will help af appear greener to customers. hey can advertise bowtons products s environmentally friendly. this will help to improve public relations, therefore increasing the customers and profit and in the long term.
      • a low interest loan from the government is a cheaper source of finance than a bank loan.
    • drawbacks
      • although the goverment may give them a low interest loan this may not cover the whole cost. this would mean using other borowing to fund the whole product. af already have a high intrest cost.
      • It may create an eyesore so if they choose to sell the factory it might reduce value. also if they are considering moving they may be wasting money due to having to import to sweden or just getting rid of it.
      • might create noise pollution which could disrupt productivity of workers.
      • rather than  burn the waste product af could look at selling the off cuts and wood chippings.
    • should they purchase it? i think they should providing they cannot sell the wood cuts and chippings for 10,000 a year. the decision depends entirely on whether they remain in bowton. this is because the burner takes 5 years to pay back. f they stay in the factory for the next 5 years then it might be a good decision but if they decide to sell up in that time it may be there won't decision to invest.


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