A Conceptual Model for Machinery & Equipment Investment Decisions

Stergios Vranakis, Prodromos Chatzoglou


Manufacturing has always been closely linked to technology, which, in recent years, is growing rapidly and
directly affects the internal and external environment of all businesses, regardless of their size, economic results
and the industry sector they belong to. Firms, in order to remain competitive, attempt to improve their
infrastructure investing in new technology and acquiring new machinery and equipment.
This study proposes a new conceptual framework for examining the reasons that manufacturing firms decide to
invest on the acquisition of new machinery and equipment in order to improve their infrastructure. It
incorporates various factors related to the internal business environment (strategy, investment decisions etc.), the
external business environment (customer relationship management, capital subsidies etc.) and the product (new
product development, innovation, manufacturing flexibility etc.). The main goal is to understand how all these
factors affect the investment decision making process.

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DOI: https://doi.org/10.5539/ijbm.v7n1p36

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