For a capital budgeting analysis where several decisions must be made concurrently, the formulation of investment alternatives can become very complex. One example is a make-or-buy analysis which also involves an optimal decision regarding the machine selection and part assignment. This paper discusses the application of an integer linear programming technique in solving the machine selection and part assignment problem. The optimal decision in selecting plastic injection machines and assigning part items to them is used as a case study problem. The annual total savings (ATS) and the total net present value (TNPV) are alternately used as an objective function. It is found that using the maximum ATS to determine the TNPV does not guarantee the optimal TNPV especially when the required capital investment is large. Additionally, the use of a mathematical programming approach allows the inclusion of realistic constraints and provides applicable results.