AMD Construction and Negotiation

Read Case 3: AMD Construction in the text (pg. 448-450) and answer the following questions in a three- to -four page, APA formatted paper:

  1. Discuss the various steps in the capital equipment acquisition process.
  2. Develop a comprehensive analysis of the negotiations between Jane Axle and Tom Reed. (Provide a chart to show financial impacts.)
  3. What is your assessment of the negotiations process, given what you have studied?  What are your recommendations for Mr. Reed?  You must justify your conclusions.

Suggestion of format for analysis:

Current Machine

CAT-1 machine-purchase

CAT-1 machine – Lease

Operating cost (without operators)

Direct Labor

Depreciation (straight line) 4 months

Lease Expense 4 Months

Interest expense at 8% for 4 months

Salvage Value after 3 years

Unexpected Costs



  • Benton, W.C. Jr.  (2014).  Purchasing and supply chain management (3rd ed.).  New York, NY: McGraw-Hill Irwin:

    • Chapter 14: Bargaining and Negotiations
    • Chapter 16: Equipment Acquisition and Disposal
    • Case 3: AMD Construction Company: Negotiating the Old-Fashioned Way


  • Maven Training videos and podcasts.  (2009, May 21).  Melanie Franklin is interviewed by the BCS – Part 3 – Interpersonal skills  [Video file].  Retrieved from

    • This video links the negotiation and bargaining topics of the week with interpersonal communication and will be useful in completing this week’s assignments.