Document Type

Closed Project

Publication Date

Fall 2010


Robert Dryden

Course Title

Advanced Engineering Economics

Course Number

ETM 535/635


Capital investments -- Evaluation, Corporations -- Finance -- Evaluation, Manufacturing industries -- Equipment and supplies -- Decision making, Manufacturing -- Mathematical models


This project is based on a real life tool comparison for a large food producer company with facilities in Oregon. The manufacturing managers are concerned about improving the productivity and reducing the amount of waste in their production lines and have examined different approaches to improve their process efficiency such as Six Sigma techniques and other Total Quality Control Management tools. Based on our manufacturing simulation model it has been identified that by monitoring the company production systems and using descriptive statistics their efficiency and waste could be mathematically modeled and actively improved.

In this paper we take the approach of consider multiple equipment options for one of their manufacturing lines and we compare them to each other to identify the most financially sound alternative with the lowest cost of implementation and operation and maximum efficiency. Our data analysis is based on real equipment performance and cost, provided by the company, fair market values that were obtained from professional appraisers, resellers, and liquidators who know the value of used assets and also by a simulation model that helped us better understand the flaws and waste on the production line.

At the end of this paper we will identify the best of the alternatives that could be recommended to higher management for implementation.


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This project is only available to students, staff, and faculty of Portland State University

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