Automation is widely believed to be the solution to productivity woes. In their zeal to automate operations, manufacturers often ignore the economic consequences of altered production factors. This paper presents economic analysis of selecting a product assembly method. The three alternative assembly methods considered are: (1) manual, (2) hybrid (part manual and part automatic), and (3)automatic. It is shown that if certain factors change, such as the equipment reliability, the chosen alternative, even though economically desirable initially, results in higher unit production costs and, therefore, becomes undesirable. Thus, many factors which are ignored in a traditional economic analysis, must be known and considered in economic analyses of this kind if the outcome is to be factual.