Recommendation for Purchase of a New Two-Color Printing Press

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Date: April 29, 2002
To: Dan Riordan, President
From: Bradley Flagge, Vice-President of Operations
Subject: Recommendation for Purchase of a New Two-Color Printing Press

Introduction

This memo is in response to your request for a recommendation concerning the purchase of a new two-color printing press. The purpose of this memo is to analyze two printing presses and recommend the best choice. The two printing press manufacturers I researched are Roland Press Inc. and Heidelberg Press Company. I spent a week at each facility observing the Roland 200 GTO and the Heidelberg Speedmaster in operation. I also met with their engineers, sales representatives, and support staff to obtain detailed information on each press. I recommend the purchase of the Heidelberg Speedmaster.

Criteria

The criteria that have been established for the recommended purchase of a new printing press are as follows: 1. Price must not exceed our $500,000 budget limit.
2. Press capacity must be 10,000 impressions per hour.
3. Available options must include ultraviolet dryers, computer control console, and automatic register systems. 4. Maximum sheet size must be 52 inches.
5. Press size must be less than 6,000 square feet and its weight no more than 15,000 pounds. Discussion

The remainder of this memo will discuss the criteria and conclude with my recommendation.

Must not exceed our $500,000 budget limit

The Heidelberg two-color Speedmaster Press has a base price of $350,000. The three options we require cost $135,000 each, for a total of $485,000. Roland's 2000 GTO has a base price of $335,000 with the options costing an additional $180,000, for a total of $515,000 (see Table 1). Heidelberg has the best value per dollar compared to the Roland. TABLE 1 Cost Comparison |

Criterion | Heidelberg | Roland |
Base price | $350,000 | $335, 000 |
Ultraviolet dryers| 35,000 | 45,000 |
Computer control console| 75,000 | 90,000 |...
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