Product mix strategy and manufacturing flexibility

Fernandes, Rui; Gouveia, Joaquim Borges; Pinho, Carlos

doi:10.1016/j.jmsy.2012.02.001

Cited by 34 publications

(20 citation statements)

References 48 publications

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“…The ability and flexibility of assigning actual values to path dependence investment decision make the real options method distinctive from the others managerial decision analysis methods (Adner, Levinthal 2004). Real options methodologies have also been introduced by Fernandes et al (2012) and Fisch and Zschoche (2012) to model decision making under uncertainty where firms face cash flow turbulence and/or changing environmental landscapes. Finally, the importance of preserving perceived/operational flexibilities in the valuation process has been shown by Hu et al (2013).…”

Section: The Model and Settingsmentioning

confidence: 99%

Sequential Capital Investment Decision Making Under Extreme Cash Fl Ow Situations: Evidence Using Monte Carlo Simulation

Zhang

Padmanabhan

Huang³

2015

Journal of Business Economics and Management

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Abstract. Uncertainty influences a decision maker's choices when making sequential capital investment decisions. With the possibility of extremely negative cash inflows, firms may need to curtail operations significantly. Traditional Net Present Value analysis does not allow for efficient management of these problems. In addition, firm managers may behave irrationally by accepting negative Net Present Value projects in the short term. This paper presents a Monte Carlo simulation based model to provide policy insights on how to incorporate extreme cash flows and manager irrationality scenarios into the capital budgeting process. This paper presents evidence that firms with irrational managers and experiencing extremely negative cash flows may, under certain conditions, reap long term rewards associated with the acceptance of negative Net Present Value projects in the short term. These benefits are largest if cost ratios (discount rates) are small, or investment horizons are high. We argue that acceptance of short term negative Net Present Value projects implies the purchase of a long term real option which can generate positive long term cash flows under certain conditions.

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Section: The Model and Settingsmentioning

confidence: 99%

Sequential Capital Investment Decision Making Under Extreme Cash Fl Ow Situations: Evidence Using Monte Carlo Simulation

Zhang

Padmanabhan

Huang³

2015

Journal of Business Economics and Management

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“…The work by Fernandes et al [7] investigates the decisions about equipment choice along with the impact of product mix distribution between standard and customized; and is based on the product mix definition of Berry and Cooper. Wang et al [31] proposed a scalability planning methodology by introducing a design-forscalability method to address the reconfigurability issue to meet the changing demand of the customer.…”

Section: Flexible Manufacturingmentioning

confidence: 99%

Flexibility in manufacturing automation: A living lab case study of Norwegian metalcasting SMEs

Wadhwa¹

2012

Journal of Manufacturing Systems

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“…Increase in the demand for product variability [2][3]. Increase in complexity of the material mix within products e.g.…”

Section: Introductionmentioning

confidence: 99%

Utilisation of Reconfigurable Recycling Systems for Improved Material Recovery from E-Waste

Barwood

Pringle

et al. 2015

Procedia CIRP

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The key features of reconfigurable manufacturing systems, including modularity, scalability and customisability, have provided production flexibility to enable manufacturers to deal with increasing demands for product variability and emerging smart materials. This increased complexity in design and material mix has also highlighted a need for more flexible and advanced technologies for recycling modern products at the end of their life. This paper examines the adoption of key features in reconfigurable systems to increase flexibility and automation in recycling activities. The application of such a 'Reconfigurable Recycling System' (RRS) has been illustrated using a specially designed robotic cell which disassembles and concentrates strategically important materials from components of electrical cars.

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Product mix strategy and manufacturing flexibility

Cited by 34 publications

References 48 publications

Sequential Capital Investment Decision Making Under Extreme Cash Fl Ow Situations: Evidence Using Monte Carlo Simulation

Sequential Capital Investment Decision Making Under Extreme Cash Fl Ow Situations: Evidence Using Monte Carlo Simulation

Flexibility in manufacturing automation: A living lab case study of Norwegian metalcasting SMEs

Utilisation of Reconfigurable Recycling Systems for Improved Material Recovery from E-Waste

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