You bought an industrial peanut desheller. Paid $10 million for it. But you skrimped on maintenance. So now it's off an eighth of an inch and well, basically, peanut butter is clogging the machine, so you have to take it down for cleaning every other week.
Not only does taking that asset offline cost you time and money, it has made your vendors start to question your reliability in delivering the 10,000 pounds of peanuts you've been selling them for years. So your brand is getting tarnished and bad things are on the horizon for the future of Tortugaville.
If you spend big capital on an asset, the financial story rarely ends there...bad managers don't make accommodation for the needed maintenance, care, love, and feeding that big beast machines always seem to need.
There should be easy math that covers something like, "If I spend $10,000 a month on maintenance, then the machine should be up and working 4 more days a month - are those 4 days worth $2,500 in profitable throughput to the company?" If the answer is "yes" or something even close to "yes" then...yeah, go for it.
Related or Semi-related Video
Finance: What is Brand Equity?3 Views
Finance allah shmoop what is brand equity Okay wait That's
brand equity high fiber yet not relevant Friend equity is
the value your brand carries Like how people feel about
it Do they love it Aided fear it recognize it
Do they need to be told to go out and
buy it Or do they just order that ford truck
without being prompted ninety seven times between penalty flags and
dealings at football games Well brand equity is usually linked
to a few things like one the number of people
who have heard of your brand e known has ever
heard of your brand Well a then you might not
have one to how much people respect and like your
brand If people hate your brand well you might have
negative brand equity For example al qaeda brand aspirin probably
would not do so well at least in america Three
your brand reputation hi brand equity is a name you
recognize easily and like or trust and that might be
something like a bmw or disney or pampers if you're
still on the road two continents and for how readily
your brand is recognized Yeah shmoop anyone uh we recognized
yet are we almost a brand We're trying Ok quick
quiz to see if you were paying attention What was
number two Right to shake Get out of
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