The simulation in lease versus buy option is set up to enhance our knowledge in the decision-making aspects of evaluating the lease versus buy options. The Bonnesante's company will show decision-making options for leasing or buying a computer. Also, deciding on how to acquire the spectrometer. In addition, the company has plans to upgrade their manufacturing capacity. Throughout all the decision making process we should be able to analyze the lease versus buy option with the given details and become more knowledgeable of the process and the options that are best for the company.
In the first scenario, the Bonnesante's company needed to have an accessible computer urgently to run their Food and Drug Administration department. This would allow them to have access to their first drug inventory. Therefore my job was to decide the best option with little timing for the company, which was should they lease or buy this equipment.
The island of Manhattan, from which the term is de...
Example of Markov Decision Process (MDP) transitio...
English: Metropolitan Life Bldg., Manhattan, New Y...With little timing, I felt the best choice for Bonnesante's to make would be to lease a mainframe computer, which has all the necessary tools they need to utilize in such short time. Also, leasing equipment has a lower cash flow option and I was able to select a 30-month lease with no down payment. This will "help preserve capital budget for other expenditures" (Roch, W., 2005, p. 1).
In the second scenario, the Bonnesante's company has to decide on whether they should purchase the spectrometer for R & D through operating lease, capital lease, or buying. I opted for buying the spectrometer because this would allow for more opportunities in the future. This spectrometer could be used for the duration of the company. There are some circumstances where purchasing out weighs leasing and this is one of the situations that it was more feasible to do so.