Document Type

Closed Project

Publication Date

Spring 2015


William Eisenhauer

Course Title

Advanced Engineering Economics

Course Number

ETM 535/635


The aim of this paper is to document the process of investigating the option of replacing existing machines used to create new design molds for shoes. Nike’s management is aware of production inefficiencies at the Mold and Tooling Center (MTC), which are causing orders backlog. As a result, many design departments outsource new design processes to third party venders in order to keep their schedules on time. This paper discuss analysis of three options that management might consider prior to make a final decision. First, keep using the existing machines and maintain the same capacity level; which would allow some design departments to outsource services through a third party. Second option, is to hire more machinist to operate the existing system with the objective of eliminating backlog. The third option is to replace three non-­‐automated machines with a new set of CNC fully automated machines; and implement a policy of zero outsourcing.


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