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A Study of Caterpillar Tractor Company's Equipment Investment Analysis Method.

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Master's thesis,

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This report based on Caterpillars Equipment Investment Analysis III EIA III program as a guide for further study of heavy equipment. THe program was developed by John Gruebele, Fred Grafton, Bob Johnson, and Alex Forbes, of Caterpillar Tractor Company. References to Equipment Investment Anlaysis III, or its abbreviated from, are taken directly form the program that is copyrighted by Caterpillar. The format presented in the Macintosh version of EIA III was copied form Caterpillars program documentation and credit for it belongs to the developers. The objective of Caterpillar in its development of EIA III is to assist their dealership network and prospective equipment purchasers in determining the best choice of equipment based on least total cost. EIA III documentation claimed to be a simple financial model that will provide 1 The after tax owning costs of two alternate machines 2 Operating costs per hour and total for the ownership period 3 Production potential 4 Net profit potential 5 Costs per hour before and after tax 6 Costs per unit of production before and after tax 7 Total discounted cash flows. This study of the EIA III program output and associated documentation that Caterpillar is providing to their dealership network. To determine the rationale of Caterpillars approach, to determine if Caterpillar provides the above items to their dealers, and to determine needed areas of improvement are the main objectives.

Subject Categories:

  • Economics and Cost Analysis
  • Computer Programming and Software
  • Surface Transportation and Equipment
  • Logistics, Military Facilities and Supplies

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