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Real-Life Decision Making

As a plant industrial engineer, you'll be responsible for buying equipment. Sometimes deciding what to buy can be very difficult.

The president of the company asks for your recommendation on the purchase of a new drill.

One of the machines being considered can handle 100 pieces a minute. At the moment, your company only needs a machine that can handle 10 pieces a minute. The 100-piece machine costs $200,000. You find a machine that can handle up to 20 pieces a minute for $100,000.

Sales forecasts suggest you'll need to be handling 30 pieces a minute within three years. Because of this, you'll need to buy a new saw within two years.

If you buy the cheaper drill, you'll likely have to replace it in a couple of years, and who knows how expensive the equipment will be then? Buying the more expensive drill will require the company to take a loan. If the sales forecasts are wrong, the company will be stuck paying for equipment it's not using to its full potential. What do you do?

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OCAP believes that financial literacy and understanding the financial aid process are critical aspects of college planning and student success. OCAP staff who work with students, parents, educators and community partners in the areas of personal finance education, state and federal financial aid, and student loan management do not provide financial, investment, legal, and/or tax advice. This website and all information provided is for general educational purposes only, and is not intended to be construed as financial, investment, legal, and/or tax advice.