Economic Team Analysis Make-or-Buy or Lease-or-Buy Group 1 ProposalF-D-S MFG. CO. INC.Problem StatementUseful Equipment Life CycleScenario 1: In-houseScenario 2: Out sourcingQuestionEconomic Team AnalysisMake-or-Buy or Lease-or-BuyGroup 1 ProposalOrganizersOrganizersTaka KamataTaka KamataJoseph WangJoseph WangTechiesTechiesKen ZustKen ZustPatricia ChungPatricia ChungSummarizerSummarizerThomas WuThomas WuF-D-S MFG. CO. INC.Owner is a Cal Poly alumniOwner is a Cal Poly alumniLocation: Pomona, CA Location: Pomona, CA Approximately 200 employeesApproximately 200 employeesIn business 20 yearsIn business 20 yearsInjection molding, i.e., fruit and Injection molding, i.e., fruit and vegetable packing and cardboard boxesvegetable packing and cardboard boxesProblem StatementTo analyze costs To analyze costs associated with associated with fabricating molds in-fabricating molds in-house or outsource house or outsource them (molds required them (molds required for mass production for mass production of plastic baskets)of plastic baskets)Useful Equipment Life CycleCNC Machine CenterCNC Machine Center15-20 years15-20 yearsInjection Molding Injection Molding 10 years10 yearsScenario 1: In-houseFixed CostsFixed CostsCNC Machine CentersCNC Machine CentersInjection Molding Injection Molding EmployeeEmployee1 x Full-Time Machinist1 x Full-Time MachinistScenario 2: Out sourcingInitial Cost = $50,000 renewable 5 yrsInitial Cost = $50,000 renewable 5 yrsMaintenance Cost = $2000/yearMaintenance Cost = $2000/yearQuestionWhich scenario is better? Which scenario is better? Scenario 1: In-house productionScenario 1: In-house productionScenario 2: Out source workScenario 2: Out source workWhat happens if more than one mold is What happens if more than one mold is made in-house?made in-house?………….. to be continued.. to be
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