Nonsense. Are you trying to argue that computers are not an intentional cost savings over floors full of accountants using pen and paper? That a loom costs more than the labor required for hand weaving? Or that businesses don't realize that they are?
> To the contrary increased automation actually raises costs directly proportional to changes in market pressure from the increased output volume and any supply chain changes that increase access to the product.
Hardly any manufactured product is genuinely long-term supply constrained. Output volume increases as a result of higher demand. Higher demand comes from lower prices. If automation isn't lowering prices then it isn't increasing output volume.
Yes. The key word there is intentional.
> Output volume increases as a result of higher demand.
Indirectly. Output directly increases from higher production capacity. Wishful thinking and consumer desire do not transform manufacturing without some changes to that manufacturing.
You're basically arguing that businesses are run by people who can't compare numbers to each other.
If automation costs less, as it often does, then businesses will adopt it because it costs less, because lowering costs increases margins (or volumes, if the lower costs are passed on).
> Indirectly. Output directly increases from higher production capacity. Wishful thinking and consumer desire do not transform manufacturing without some changes to that manufacturing.
Not indirectly. If there is demand for 5000 cars at a given price and you suddenly gain the capacity to manufacture 10,000 cars at that price, you still aren't going to manufacture 10,000 cars unless you expect somebody to buy them. Having the capacity without the demand is nothing.
And having the demand without the capacity would only cause businesses to expand capacity, whether through automation or otherwise. If it was profitable to make 5000 cars by hand and there is demand for 10,000 cars at that price then they would just hire twice as many people to make them if nothing else.
Which is why you amortize the up-front cost over the expected number of units adjusted for time value of money. In which case the automation often still results in lower overall costs.
> Comparing variable numbers is algebra but this is a calculus problem.
Calculus still leads to comparing numbers. Businesses know how to do calculus.
In what universe is replacing floors full of accountants with a room full of computer(s) anything other than intentional?
"Oh, whoops, we bought these computers on a whim, and now all of a sudden all but a fraction of these accountants are completely redundant! Total accident, who would've guessed it?"
Higher production volume means more material purchased, increased warehouse costs, people hired for warehousing, and everything related.
So it all depends on the organization.
Economically that is always the desired direction, but not because people cost too much. Changes to automation are incredibly expensive to build. The benefits to increased automation are increased output volume and improved quality control.
Any cost reductions that arise are almost always completely unintended. To the contrary increased automation actually raises costs directly proportional to changes in market pressure from the increased output volume and any supply chain changes that increase access to the product. You have to consider things like marketing, regulation, distribution, and so forth that do not benefit from the same automation efforts.