An options view of investments in expansion-flexible manufacturing systems

Kumar, Ram L.

doi:10.1016/0925-5273(95)00024-i

Cited by 20 publications

(11 citation statements)

References 20 publications

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“…Additional setup cost to switch between workstations, jobs, or products. Galvin (1987), Gascon and Leachman (1988), Sethi and Sethi (1990), Yan and Zhang (1997), Wolsey (1997), Van Oyen (1998), Inman (1999), Tsubone and Horikawa (1999), Robinson and Sahin (2001), Lahmar et al (2003), Han et al (2003), Hur et al (2003), de Matta and Miller (2004), Hajji et al (2004), Wu et al (2004), Brahimi et al (2006) Switching the production rate Hall (1988), Kim and Han (2001), Kamrad and Ernst (2001), Larsen (2005) Machine start-up/shutdown Pattloch and Schmidt (1996), Liaee and Emmons (1997), Kim and Han (2001), Khouja (2005), Sim et al (2006) Machine cleaning Kumar (1995), Wolsey (1997), Olson and Schniederjans (2000), Robinson andSahin (2001), de Matta andMiller (2004), Brahimi et al (2006) Production loss Watkins (1957), Paul et al (1980), Weber (2006 Tooling Kumar (1995), Sim et al (2006), Brahimi et al (2006) Deterioration in quality Paul et al (1980), Khouja (2005) Machine adjustment Koulamas (1993), …”

Section: Accounting For Switching (Changeover) Costsmentioning

confidence: 98%

The EOQ repair and waste disposal model with switching costs

Saadany

Jaber

2008

Computers & Industrial Engineering

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Section: Accounting For Switching (Changeover) Costsmentioning

confidence: 98%

The EOQ repair and waste disposal model with switching costs

Saadany

Jaber

2008

Computers & Industrial Engineering

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“…[3,[22][23][24][25][26]). The bases of the developments are the decisions whether to buy flexible or non-flexible equipment and how much capacity should be acquired, with regard to the fact that investment is irreversible.…”

Section: Literature Reviewmentioning

confidence: 99%

Product mix strategy and manufacturing flexibility

Fernandes

Gouveia

Pinho

2012

Journal of Manufacturing Systems

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“…For example, Kumar [29] considers investment decisions related to expansion-flexible manufacturing systems and evaluates its value using a valuation model for option proposed by Margrabe [30]. And Bengtsson [31] investigates manufacturing flexibility in terms of real options.…”

Section: Uncertainty Inherent In the Ams Investment Projectmentioning

confidence: 99%

An expository note on an economic justification of investments in advanced manufacturing systems

Kim

2005

Int J Adv Manuf Technol

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This is not an overview paper. This paper is concerned with simply making an expository note on three issues that should be taken into account when making an economic justification of investments in advanced manufacturing systems. They are the product of cost information, uncertainty, and intangible benefits available from the investment, which have been widely discussed in isolation for the last 20 years. The main purpose of this paper is primarily to provide practitioners with a synopsis of leading edge research in the area of justifying investment in advanced manufacturing systems and to stimulate a desire for better understanding and application of knowledge and techniques that will enhance professional practice.Once companies replace their existing manufacturing systems with advanced manufacturing systems, the characteristics of the manufacturing environment are greatly changed in general. Such different characteristics usually entail three problems in justifying investment in the advanced manufacturing systems: (1) Calculating an accurate product cost, (2) Dealing with uncertainty inherent therein and (3) Intangible benefits available from the investment project. Each of these problems has been greatly discussed, mostly independently, in the academic world for the last two decades. In this paper we will revisit and discuss each of them on a general, but relatively informal, level using simple examples to illustrate the main points. The paper is intended to be expository and aimed primarily to hopefully provide practitioners with a synopsis of leading edge research in the area of justifying investment in advanced manufacturing systems and to stimulate a desire for better understanding and application of knowledge and techniques that will enhance professional practice.

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An options view of investments in expansion-flexible manufacturing systems

Cited by 20 publications

References 20 publications

The EOQ repair and waste disposal model with switching costs

The EOQ repair and waste disposal model with switching costs

Product mix strategy and manufacturing flexibility

An expository note on an economic justification of investments in advanced manufacturing systems

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