Teaching Note: Northwest traffic supply (NWTS) case: considering the expansion of traffic sign manufacturing Available to Purchase

As Northwest Traffic Supply (NWTS) prepares its annual capital (CAPEX) budget, CEO Rob Carr faces a pivotal decision that could shape the company’s future. Interestingly, manager Neil Gillis submitted the only CAPEX proposal. Gillis recommended purchasing a digital printing system to mitigate risk, improve efficiency and position the company for the future. Rob was quite surprised by the proposal. Traditionally, new investment proposals focus on addressing capacity constraints. Sign manufacturing is the fastest-growing business segment of NWTS; however, the company has excess capacity. Rob was perplexed for a moment. Normally, NWTS only invested in additional capital equipment to support growth,...