17.Quantifying the Flexibility Value in Automated Manufacturing Systems

8/3/2019 17.Quantifying the Flexibility Value in Automated Manufacturing Systems

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Journal of Manufacturing SystemsVolume 13/No. 2

Quant i fy i ng the F l ex i b i l i t y Va l ue i nA u t o m a t e d M a n u f a c t u r i n g S y s t e m sY o u n g S . P y o u n * a n d B y o u n g K . C h o i ,K o r e a Advanced Inst i tu te o f S c i e n c e a n d T e c h n o l o g y (KAIST), Tae jon* n o w a t S u n Mo o n U n i v e r s i t y

A b s t r a c tT h i s p a p e r a t t e m p t s t o n a r r o w t h e d i s c r e p a n c yb e t w e e n t h e p r o m i s e d a n d a c t u a l b e n e f i ts o f t h e a v a i l -a b l e f i n a n c i a l e v a l u a t i o n t o o l s f o r c o n s i d e r i n g c o s t /b e n e f i t tr a d e o f f s o f i n v e s t m e n t in f le x i b l e a u t o m a t i o n o fm a s s m a n u f a c t u r i n g s y s t e m s a n d t h e a c t u a l b e n e f i t s .T o o b t a i n a d e e p e r i n s i g h t i n t o f l e x i b i l i t y a n d t o g i v ec o n s i d e r a t i o n t o a l l p o s s i b l e a s p e c t s o f u s e r e x p e r i -e n c e a n d c a p a b i l i t y , t h e c o n c e p t s o f p o t e n t i a l f l e x i b i l i t ya n d r e a l i za b l e f l e x i b i l i t y a r e i n t r o d u c e d . Po t e n t i a l f l e x i -b i l i t y i s c l a s s i f i e d i n t o f o u r e l e me n t s a n d r e a l i za b l ef l e x i b i l i t y i n t o 1 1 e l e me n t s , a n d a s y s t e ma t i c p r o c e d u r ef o r q u a n t i f y in g r e a l i za b l e f l e x ib i li ty i n m o n e t a r y t e r m s i sp r o p o s e d . T h e p r o c e d u r e h a s b e e n a p p l i e d t o a t e s tc a s e w i t h e n c o u r a g i n g r e s u l t s .Keywords: Flexib il ity Value, Automated Manufac-tur ing Systems , Investment Planning an d Just i ficat ion

In t roduct ion and L i te ra ture Rev iewP r o d u c t i o n m a n a g e r s o f m a n y f i r m s , u n d e r p r e s-

s u r e t o m a k e a u t o m a t e d m a n u f a c t u r i n g s y s t e m sm or e f l e x ib l e , a r e f ind ing tha t t he r e i s s t i l l ac o n s i d e r a b l e g a p b e t w e e n b e n e f i t s p r o m i s e d b yf ina nc ia l e va lua t ion too l s a nd be ne f i t s r e a l i z e d inp r a c t i c e . 1 -s I n th i s pa pe r we a t t e m pt to na r r ow th i se v a l u a t i o n g a p . H e r e w e d e f i n e t h e f l e x ib i l it y o f am a n u f a c t u r i n g s y s t e m a s i t s c a p a b il i ty t o c o p e w i t hin t e r na l a nd e x te r na l c ha nge s .

I n p r e v ious s tud ie s , m a ny r e se a r c he r s ha ve t r i e dto qua n t i f y the f l e x ib i l i t y i n m one ta r y t e r m s a ndi n t e g r a t e i t w i t h d e c i s i o n - m a k i n g t o o l s . W e c a nc la s s i f y the se s tud ie s i n to th r e e g r oups a c c o r d ing tot h e r e s e a r c h e r s ' m e t h o d s o f q u a n t i f y i n g t h e f l e x i b il -i ty ( see T a b le 1 ) .

A m o n g t h e r e s e a r c h e r s i n G r o u p C o f t h e t a b l e ,w h o s e m e t h o d s w e f o l l o w , S o n a n d P a r k ' s 24 s t u d ywa s the f i r s t t o qua n t i f y e a c h o f f ou r f l e x ib i l i t i e s ,w h i c h w e r e i d e n t i f i e d s ep a r a te l y i n m o n e t a r y t e r m s ,

a nd to u se d i f f e r e n t un i t s f o r m e a su r ing f l e x ib i l i t ya n d q u a n t i f y i n g f l e x i b i l i t y i n m o n e t a r y t e r m s . B u tthe y d id no t d i s t i ngu i sh the f l e x ib i l i t y t ha t i s i nhe r -e n t i n t h e m a n u f a c t u r i n g s y s t e m f r o m t h e f l ex i b i li t ytha t t he u se r c a n a t t a in a f t e r im p le m e n ta t ion . 28-3A l s o , a s S w a m i d a s s a n d W a l le r3 1 h a v e r e c o g n i z e d ," r e g a r d l e s s o f t h e d i v e rs i t y o f a p p r o a c h e s ,r e se a r c he r s a r e no t suc c e s s f u l i n qua n t i f y ing s t r a t e -g i c be ne f i t s ( o f f l e x ib i l i t y ) f o r u se in f ina nc ia lj u s t i f i c a t i o n m o d e l s . "

S o m e r e s e a r c h e rs p e r c e i v e t h a t t h e e v a l u a t i o n g a par ises f rom lack of ins igh t in to f lexibi l i ty . 6-s '29Esp e c ia l ly , Gu p ta a n d S o m e r s 32 p r opo se d a n in s t r u -m e n t d e s i g n e d t o m e a s u r e m a n u f a c t u r i n g f le x i b i li t ya n d i d e n t i f i e d u n d e r l y i n g c o m p o n e n t s o f m a n u f a c -tu r ing f l e x ib i l i t y u s ing f a c to r a na lys i s . B u t t he yl ike wise d id no t c l e a r ly d i s t i ngu i sh the f l e x ib i l i t yi n h e r e n t i n t h e m a n u f a c t u r i n g s y s t e m f r o m t h ef l e x ib i l i t y t ha t t he u se r c a n a t t a in a f t e r im p le m e n ta -t i o n . C o n s e q u e n t l y , w e d e v e l o p a n e w a p p r o a c h t or e m e d y s o m e o f t h e a b o v e s h o r t c o m i n g s .

W e r e s t r i c t o u r a t t e n t i o n t o a u t o m a t e d m a s sm a n u f a c t u r i n g s y s t e m s , t h a t i s m a n u f a c t u r i n g s y s -t e m s f o r m a s s p r o d u c t i o n , s u c h a s c o n v e n t i o n a lt r a n s f e r l i n e s a n d t h e " h i g h - c a p a c i t y s y s t e m s "m e n t i o n e d i n R a n t a a n d T c h i j o v . 3 In a n e x t e n s i v es u r v e y4 o f f l e x ib l e m a nuf a c tu r ing sys t e m s in s t a l l e dw o r l d w i d e , a b o u t 7 8 o f t h e 3 0 0 s u r v e y e d w e r e f o rm a s s p r o d u c t i o n . T h i s f ig u r e a m o u n t s t o a b o u t 2 6 %o f t h e n u m b e r o f i n s t a l l a t i o n s , b u t t h e p e r c e n t a g ew o u l d b e m u c h h i g h e r i n d o l l ar v a lu e s ( o n a c c o u n to f t h e l a r g e r m a s s m a n u f a c t u r i n g s y s t e m s ) . F u r t h e r ,ba se d on a n a na lys i s o f I n t e r na t iona l I n s t i t u t e f o rA p p l i e d S y s t e m s A n a l y s i s ( I I A S A ) d a t a f r o m 8 0 0f l e x i b l e m a n u f a c t u r i n g s y s t e m s w o r l d w i d e , R a n t aa n d T c h i j o v f o u n d t h a t o n e o f t h e t w o c l a s s e s o fe c o n o m i c a l l y s u c c e s s fu l s y s t e m s i s " t h e l a r g e -s c a l ea n d t e c h n i c a l l y c o m p l e x s y s t e m s u s e d i n l a r g e -

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Journal of Manufacturing SystemsV o l u m e 1 3 / N o . 2

Table 1M e t h o d s o f M e a s u r i n g o r Q u a n t i f y i n g F l e x i b i l i t y

H o w t o m e a s u r e o r q u a n t i f y t h e f le x i bi li ty T y p i c a l r e s e a r c h e r sG r o u p T h e r e a r e m a n y i n t an g i b le p a r t s o f i H o d d e r a n d R i g g s , K a p l a n 1

A f l ex i b il it y , s o c o n s i d e r t h e m a s a b l a c k b o x . i K r i n s k y a n d M i l t e n h e r g nT h e i n t a n g i b l e p a r t s o f f le x i bi li ty t h a t i D e m m e l a n d A s k i n 1 2, S o n 1 3,G r o u p c a n n o t h e q u a n t i f i e d i n m o n e t a r y t e r m s a r e i S t a r e a n d K u u l a 1 4, S u r e s h 1 5,B m e a s u r e d b y a s u r ro t za t e v a l u e ( T h e i T r o x l e r - a n d B l a n k 5 , V e n k a 6,s c or i ng m e t h od i s us ua l l y a pp l i e d) i W a ba l i c ks lT ' Z a h i r l s

G r o u p T r y t o q u a n t i f y a l l t h e i n t a n g i b l e p o r t s o f i A z z o n e a n d 1 3 e r te l e ~ , H u t c h i n s o n ~H u t c h i n s o n a n d H o l l a n d z x ,C f l e x i b i li t y a s f a r a s i s p o s s i b l e in m o n e t a r y :~ H u t c h i n s o n a n d S i n h a = , S on 23" ~,[ S o n a n d P a r k u ' m , S u r e s h m

v o l u m e p r o d u c t i o n f o r t h e r e p l a c e m e n t o f f i x e da u t o m a t i o n a n d t r a n s f e r l i n e s . " B a s e d o n t h e i rf i n d i n g s , t h e y c o n c l u d e d t h a t o n e o f t h e t w o b a s i cd i f f u s i o n p a t h s o f f l e x i b l e m a n u f a c t u r i n g s y s t e m sw o u l d b e t o w a r d s u c h s y s t e m s . ( T h e o t h e r p a t h i sf o r c o m p a c t s m a l l - s c a l e s y s t e m s r e p l a c i n g s e m i -m a n u a l s m a l l - b a t c h p r o d u c t i o n l i n e s . ) A s i m i l a ro b s e r v a t i o n t h a t F M S s c o u l d e c o n o m i c a l l y re p l a c et r a n s fe r l i n e s w a s m a d e b y H u t c h i n s o n 2 as f a rba c k a s 1976 .

C o n c e p t s o f P o t e n t i a l F l e x i b i l i t ya n d R e a l i z a b l e F l e x i b i l i t yB a se d on the pe r spe c t ive tha t t he f l e x ib i l i t y

i n h e r e n t i n a m a n u f a c t u r i n g s y s t e m m u s t b e d i s t i n -gu i she d f r om the f l e x ib i l i t y t ha t t he u se r c a n a t t a ina f t er i m p l e m e n t a t i o n , 2 a -a w e d e v e l o p a n e wa ppr oa c h tha t a na lyz e s f l e x ib i l i t y s e pa r a t e ly f r omt h e s y s t e m m a n u f a c t u r e r ' s a n d u s e r ' s p o i n t o f v i e w .P o t e n t i a l F l e x i b i l i t y

W h e n w e a n a l y z e t h e f l e x i b i l i t y i n h e r e n t i n am a n u f a c t u r i n g s y s t e m f r o m t h e s y s t e m m a n u f a c t u r -e r ' s p o i n t o f v i e w , b e f o r e i t i s i m p l e m e n t e d a n dope r a t e d by the use r , we r e f e r t o i t a s po te n t i a lf l e x ib i l i t y . Thus ou r c onc e p t o f po te n t i a l f l e x ib i l i t yi s s i m i l a r t o H y u n a n d ah n ' s 7 c o n c e p t o f " h a r d w a r ea nd so f twa r e f l e x ib i l i t y t ha t a r e bu i l t a p r io r i bye q u i p m e n t m a n u f a c t u r e r s . "R e a l i z a b l e F l e x i b i l i t y

T h e u s e r w i l l o p e r a t e t h e m a n u f a c t u r i n g s y s t e mus ing bo th po te n t i a l f l e x ib i l i t y a nd the i r e ng ine e r inga n d m a n a g e m e n t c a p a b i l i t y t o r e a l i z e t h e g i v e nm a nuf a c tu r ing s t r a t e gy a nd to f u l f i l l spe c i f i e d m a r -k e t d e m a n d . W h e n w e a n a l y z e t h e f l e x i b i l i t y t h a t

w i l l b e r e a l i z e d f o l l o w i n g s u c h o p e r a t i o n f r o m t h euse r ' s po in t o f v i e w , we r e f e r t o i t a s r e a l i z a b lef l e x ib i l i t y . Th i s r e a l i z a b le f l e x ib i l i t y c a n the n beq u a n t i f i e d i n m o n e t a r y t e r m s , i n w h i c h c a s e w er e f e r t o i t a s f l e x ib i l i t y va lue .Our c onc e p t o f r e a l i z a b le f l e x ib i l i t y i s s im i l a r t oG u p t a a n d B u z a c o t t ' s c o n c e p t o f f le x i b il i ty : " F l e x -ib i l i t y i s t he r e su l t o f f a c to r s l i ke phys i c a l c ha r a c -t e r i s t i c s , o p e r a t i n g p o l i c i e s a n d m a n a g e m e n tp r a c t i c e , ' ' 6 a nd ou r f l e x ib i l i t y v a lue i s s im i l a r t oS o n a n d P a r k ' s " o p p o r t u n i t y c o s t . " 2 4

R e l a t i o n s h ip s a m o n g v a r io u s c o n c e p t s i n t r o d u c e da b o v e a r e s u m m a r i z e d i n F igure 1 . N o t e t h a t t h em a n u f a c t u r i n g s t r a t e g y w e a r e c o n s i d e r i n g h e r e i sf unc t ion a l - l e ve l s t r a t e gy , 33 the goa l o f wh ic h i ss t r e n g t h e n i n g t h e l o n g - t e r m c o m p e t i t i v e n e s s a n dp e r f o r m a n c e o f t h e b u s i n e s s t h r o u g h m a n a g e m e n to f qua l i t y , c o s t , de pe nd a b i l i t y , a n d f l e x ib i l i t y . 34 W ef oc us ou r s tudy on r e a l i z a b le f l e x ib i l i t y a nd f l e x i -b i l i t y va lue .

E s s e n t i a l E l e m e n t sP o t e n t i a l F l ex i b il it y a n d I ts M e a s u r e m e n t

B a s e d o n a r e v i e w o f r e c e n t l i t e r a t u r e o n f l e x i -b i l i t y i n l i gh t o f t he c onc e p t s de sc r ibe d e a r l i e r , wec la s s i f y po te n t i a l f l e x ib i l i t y i n to f ou r e s se n t i a l e l e -m e n t s :1. Increm ental inves tmen t f lex ibi l i ty c a n b e d e f i n e d

a s t h e c a p a b i l i t y o f a m a n u f a c t u r i n g s y s t e m t oi n c r e a s e o r d e c r e a s e i t s c a p a c i t y w h e n n e e d e d .

Ma nufa c t u r i ng S t r a le gy & " ~I n f or m a ti o n o n M a A e t D e m a n d ]

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[ . . . , ~ . ~ . - . a l b , , .. [~ Quant i fied in monetatV erms

Flexibi l i ty Value I

Figure 1I n t e r a c t i o n B e t w e e n P o t e n t i a l F l e x i b i l i t y a n d t h e U s e r ' sC o n t i n g e n c y a n d T h e i r R e l a t i o n s h i p s w i t h R e a l i z a b l e F l e x i b i l i t ya n d F l e x i b i l i t y V a l u e

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G e n e r a l d a t a f o r m e a s u r i n g t h i s f l e x i b i l i t y a r em a x i m u m m a n u f a c t u r i n g c a p a c i t y , t o ta l c o st ,a n d l e ad t i m e o f t h e m a n u f a c t u r i n g sy s t e m , a n di t s i n c r e m e n t a l / d e c r e m e n t a l c a p a c i t y , c o s t , a n dl e a d t i m e .2 . Too l in g f l e x ib i l i t y c a n b e d e f i n e d a s t h e c a p a b i l -i ty o f a m a n u f a c t u r i n g s y s t e m t o p r o d u c e n e w o ri m p r o v e d p a r t s . G e n e r a l d a t a f o r m e a s u r i n g t h i sf l e x i b i l i t y a r e t h e r e q u i r e d t i m e a n d c o s t f o rr e n e w i n g o r a l t e r i n g t h e t o o l i n g s y s t e m : j i g s a n df i x tu r e s , c u t t in g t o o l s , a n d e x c h a n g e a b l e o ra d j u s t a b l e p a r t s o f t h e i n - p r o c e s s i n s p e c t i o ns y s t e m , l o a d i n g / u n l o a d i n g s y s t e m , a n d tr a n sp o r -t a t i o n s y s t e m .

3 . In te rc h an ge f l e x ib i l i t y c a n b e d e f i n e d a s t h ec a p a b i l it y o f a m a n u f a c t u r i n g s y s t e m t o s u p p o r ti n t e r c h a n g e b e t w e e n s t a ti o n s o f t h e i r t o o l i n g a n df u n c t i o n s w h e n n e e d e d . T h i s f l e x i b il i t y isn e e d e d w h e n r e s c h e d u l i n g o f a m a n u f a c t u r i n gs y s t e m i s r eq u i r ed f o l l o w i n g a c h a n g e i n p r od u c tm i x , a b r e a k d o w n o f t h e m a n u f a c t u r i n g s y s t e m ,a n d s o o n . G e n e r a l d a t a f o r m e a s u r i n g t h i sf l e x i b i l i t y a r e a v e r a g e b r e a k d o w n p e r i o d a n df r e q u e n c y o f t h e m a n u f a c t u r i n g s y s t e m , c a p a c i t yf o r i n t e r c h a n g e b e t w e e n s t a t i o n s o f t h e i r t o o l i n ga n d f u n c t i o n s , a n d r e q u i r e d t i m e a n d c o s t f o rs u c h i n t e r c h a n g e .

4 . S o f tw are f l e x ib i l i t y c a n b e d e f i n e d a s t h e c a p a -b i l it y o f a m a n u f a c t u r i n g s y s t e m t o h a n d l e t h es y s t e m c o n t r o l s o f t w a r e i n t h e a b o v e c a s e s .S y s t e m c o n t r ol s o f t w a r e i n c l u d e s p a r ts p r o g ra m -m i n g , n e t w o r k m a n a g e m e n t o f s t a t io n s , a n d t h ei n t e r fa c i n g t e c h n o l o g y b e t w e e n t h e m a c h i n et o o l s a n d t h e i r t o o l i n g , i n s p e c t i o n , l o a d i n g /u n l o a d i n g , a n d t r a n s p o r t a ti o n s y s t e m s . G e n e r a ld a t a f o r m e a s u r i n g t h i s f l e x i b i l i t y a r e t h er e q u i r e d e n g i n e e r i n g c a p a b i l i t y f o r t h e s y s t e mc o n t r o l s o f t w a r e a n d t h e r e q u i r e d t i m e a n d c o s tf o r c h a n g e . H e n c e f o r t h w e s h a l l u s e t h e p h r a s e" s o f t w a r e " f o r " s y s t e m c o n t r o l s o f t w a r e . "

R e a l i z a b l e F l ex i b i l i ty , I ts M e a s u r e m e n t , a n dF l e x i b i l i t y V a l u e

B a s e d o n a r e v i e w o f r e c e n t li t e ra t u r e , w e c l a s s i f yr e a l i z a b l e f l e x i b i l i t y i n t o t h r e e g r o u p s a n d f u r t h e ri n t o 11 e l e m e n t s . W e a l s o c o n s i d e r h o w t o m e a s u r er e a l i z a b l e f l e x i b i l i t y a n d q u a n t i f y i t i n m o n e t a r yt e r m s , d e d u c i n g f o r e a c h e l e m e n t o f r e a l i z a b l e

f l e x i b i l i t y a n e q u a t i o n f o r i t s a s s o c i a t e d f l e x i b i l i t yv a l u e . R e q u i r e d n o m e n c l a t u r e is s u m m a r i z e d inTab le 2 . F u r t h e r d e t a il s a r e i n P y o u n a n d C h o i . 3 s1 . Th e in v e s tm e n t po l i c y g rou p i s c a t e g o r i z e d b y

t h e u s e r' s c a p a b i l i ty t o c o p e w i t h t h e i n v e s t m e n tp o l i c y , s o t h r ee e l e m e n t s b e l o n g t o th i s g r ou p .( 1 ) F l e x i b i l it y f o r s e q u e n t ia l i n v e s t m e n t c a n b e

d e f i n e d a s t h e u s e r ' s c a p a b i l i t y s e q u e n t i a l l ya n d i n c r e m e n t a l l y / d e c r e m e n t a l l y to i n v e s tt h e c a p a c it y o f a m a n u f a c t u r i n g s y s t e m t oc o n f o r m w i t h n e w i n fo r m a t i on o n m a r k e td e m a n d . G e n e r a l d a t a f o r m e a s u r i n g t h i sf l e x i b i l i t y a r e a l m o s t i d e n t i c a l w i t h d a t a f o rt h e i n c r e m e n t a l i n v e s t m e n t f l e x i b i l i t y i np o t e n t i a l f l e x ib i l it y : m a x i m u m m a n u f a c t u r -i n g c a p a c i t y , t o t a l c o s t , a n d l e a d t i m e a n d i t si n c r e m e n t a l / d e c r e m e n t a l ca p a c i t y , c o s t , a n dl e a d t i m e . I t i s d i f f i c u l t t o q u a n t i f y t h i sf l e x i b i l i t y d i r e c t ly i n m o n e t a r y t e r m sb e c a u s e t h i s f l e x i b i l i t y i s r e a l i z e d o n l y i na c c o r d a n c e w i t h t h e s e q u e n t i a l i n v e s t m e n tp o l i c y a d o p t e d f o l l o w i n g t h e d a t a o n m a r k e td e m a n d , a p o l ic y w h i c h i s i t s e l f a f u n c t i o n

Table 2N o m e n c l a t u r e f o r D a t a R e q u i r e d f o r Q u a n t i f y i n g R e a l i z a b l eF l e x i b i l i t y i n M o n e t a r y T e r m s

~ o123 - -4567891o~

1112

1516

182o21222324N262729305 1

N o m e n . Th e r e l a t e dContents flexibi lit ~" valuei ! The m i n i m u m a t t r ~ t i v e r a t e o f rettwa (MARR) allt i Income ta x r a t e (includ~nll o t h e r t a x e s )B~ i Book value at the e n d o f the nt h y e a r i T h e rate o f S (salvage value) to bookvalue: S = . B~

f~ ~ Mte~ation of tooli and ~ft war e NP, CIP= i The o c c u r r e n c e p r o b a b i l i t y o f p r o j e c t a b a n d o n m e n t i n the nth y e a rP' i Th e probability that the products are adopted w i t h o u t r e v i s i o nP= i The probability that the 10oductea r e a d o p t e d with '

NN, ~T he average actual l i fe o f the manuf~:tm~ s y s t e mr~ i Th e a v e r a g e n u m b e r of Parts rev i s ions in the n t h y e a r

i The a v e r a g e n u m b e r o f h r ~ , ; k d o w n s in the nth y e a r! The ave~aKe c o s t r e q u i r e d f o r r e s c b e d u l i n gT h e a v e r a g e r f t a n u f a c t u r ~ g c a p a c i t y a v a i l a b l e dur i ng t nea l~wn :96 (of M.)d T h e a v e r i o d i r e d f o r ~ " b r e a k d o w n

al lP A . N PP A , N P

N PN PN PN PCI

_ _ TC ___TC, PM, UCTCT C ~ _ __~ IPwcwe

wcIPIP

el The a v e r a g e r e v e n u e ( o r a v e r a g e a d d e d v a l u e ) p e r i t e m$ i T h e a v e r a g e b e n e f it w h i c h the us~- "~n obtain per )ob _

i The a v e r a g e s i z e o f w o r k f o r c e r e q u i r e d fo r o pe r a ti o n o f t h e s y s t e mw. in the nt h y e a rJ ~ ..: o r t i o n o f t h e s t e m i n t h e n ~T h e av e rs e n ~ o f d i ff e r e n t o bs p e r u n i t o f m a n p o w e r r e q u i re d~ v e n t o in - c o s t r a t e p er ~ i t W I pV . i T h e a v e r a g e W I p i n t h e n t h y e a rrn~ ! The ~ f chart es in c t m i x i n the n th ~ y ~

The av e numb~ of n~w i tems introduced in the nth ~/e~r_C3 i The a v e r a g e c o s ~ f o r a l t e r i n g p r c x : e s s ~ n e w i te m introductionC~ !iTh e aver age manufacturing c a p a c i t y t r a n s f e r a b l e f o r a n o t h e r u s e :96 (of M.)

PMNINIUC

UC}. The criterion f o r s e l e c t i n g u n d e r d e m a n d c o n t r olThe " " ( o r m i n i m u m a d d e d value)[ that the u s e r c a n atta in us ing excess c a p a c i t ys i The sta " ear for the user' s underdertmnd contro l UCQ. ~be av e demand in ~ n th year _ _ _ _ TC, UC, OC~ i The m a x . m a n u f a c t u r i n g c a p a c i t y par 3 shifts at the beginning TC, UC, OC~ i of ~ e n ~ ,t i The average extra cos t for subcon~Pact praduc~on ( item) OCN i The p r o j e c t l i f e o r t h e p r o d u c t l l f e all

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of f l e x i b i li t y . S o we a s sum e t h i s f l e x i b i li t yv a l u e ($I) i s a l r e a dy i m pl i c i t i n t he p r e se n twor t h o f e a c h a l t e r na t i ve se t ou t i n t hes e q u e n t ia l i n v e s t m e n t p o l i c y .

( 2 ) F l e x i b i l i t y f o r p r o j e c t a b a n d o n m e n t c a n b ede f i ne d a s t he use r ' s c a pa b i l i t y t o a da p t t hem a n u f a c t u r in g s y s t e m t o a n o t h e r p r o j e c t (o ru s e ) w h e n p r o j e c t a b a n d o n m e n t i sd e m a n d e d . U n d e r a n u n c e r t a i n m a r k e t s i t u -a t i o n , i t m a y b e n e c e s s a r y t o a b a n d o n t h ep r o j e c t e a r l i e r t ha n t he p l a nne d p r oduc t l i f ea s a r e su l t o f a n una n t i c i pa t e d s i t ua t i on - -g o v e r n m e n t r e g u la t io n , n e w t e c h n o l o g yi n t r o d u c t i o n , l e s s d e m a n d t h a n e x p e c t e d ,a n d s o o n , i n w h i c h c a s e t h e u s e r s h o u l dt r a ns f e r t he i n s t a l l e d sys t e m t o a no t he r u sewi t h m i n i m um l oss . Th i s f l e x i b i l i t y c a n bem e a s u r e d b y t h e e x p e c t e d r e s i d u a l v a lu e o f am a n u f a c t u ri n g s y s t e m w h e n a b a n d o n m e n t i sd e m a n d e d t o g e t h e r w i t h t h e o c c u r r e n c ep r o b a b i l i t y o f s u c h a b a n d o n m e n t . S o t h i sf l e x i b i l i t y va l ue (PA) c a n be qua n t i f i e d byEq. (1) as the increased cost , t ha t i s t hed i f f e r e n c e b e t w e e n b o o k v a l u e a n d s a l v a g ev a l u e . W e c a n a s s u m e e a c h Pan ( t he oc c ur -r e n c e p r o b a b i l it y o f p r o j e c t a b a n d o n m e n t i nt h e n t h y e a r ) i s i n d e p e n d e n t b e c a u s e Pan isve r y sm a l l so t ha t i t m a k e s l i tt le d i f f e r e nc e t of l e x i b i li t y v a l ue .

N BnPanPA = ( l - t ) (1-~ /) (1 q- i ) nn = l

(1 )

( 3 ) F l e x i b i l i t y f o r ne w p r o j e c t a da p t a t i on c a n bede f i ne d a s t he use r ' s c a pa b i l i t y t o a da p t t hem a n u f a c t u r i n g s y s t e m t o a n o t h e r n e wpr o j e c t a f t e r f i n i sh i ng t he p l a nne d p r o j e c t .Th e use r w i l l t yp i c a l l y f a c e t h r e e c a se s a t t hee nd o f a p l a nne d p r o j e c t . The f i r s t c a se i st ha t p r oduc t s o f a p l a nne d p r o j e c t w i l l bea d o p t e d t o a n e w p r o j e c t w i t h o u t re v i s io n . I nt h i s c a se , t he use r w i l l s i m pl y c ons i de r t ha tp r o d u c t l i f e h a s b e e n e x t e n d e d t o b e e q u a l t ot he l i f e o f t he i n s t a l l e d sys t e m i t s e l f . These c ond c a se i s t ha t p r oduc t s w i l l be a dop t e dt o a n e w p r o j e c t w i t h s o m e r e v i s i o n . S o m ea l t e r a t i on o f p r oc e ss w i l l be ne e de d i n t h i sc a se . The t h i r d c a se i s s i m pl y e nd i ng t he

p l a nne d p r o j e c t a nd t r e a t i ng t he sys t e m a ssa l va ge . Th i s f l e x i b i l i t y c a n be m e a sur e d byt h e o c c u r r e n c e p r o b a b i li ty o f e a c h c a s e a n dt he r e qu i r e d t i m e a nd c os t f o r a l t e r i ng t het oo l i ng a nd so f t wa r e . S o t h i s f l e x i b i l i t yv a l u e (NP) c a n be qua n t i f i e d by Eq . ( 2 ) a si nc r e a se d / de c r e a se d c os t, t ha t i s t he d i f f er -e n c e b e t w e e n t h e e x p e c t e d r e s i d u a l v a l u et ha t r e su l t s f r om e xp l o i t i ng t h i s f l e x i b i l i t ya nd t he r e s i dua l va l ue a t t he e nd o f p r o j e c t .

NP ff i - P .BN+P . ( B~- c , ( 1 - t ) }+ ( 1 - P . - P ~) { ' t ( I - t ) * t }BN- { ' ~( 1 - t ) * t }BN ( 2 )(1+i) ~

T h i s e q u a t i o n i s a p p l ic a b l e o n l y w h e n N


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( 3 )

e nou gh t o r e sc he du l e t he ma nufa c t u r i ng sys -t e m; t he u se r a l so ne e ds t o ke e p p roduc i ngdur i ng t h i s pe r i od wi t h r e duc e d c a pa c i t y .W e t h i nk t ha t i t w i l l be c ome t he u se r ' sr e gu l a r j ob t o r e sc he du l e t he ma nufa c t u r i ngs y s t e m t o c o n t i n u e p r o d u c i n g w i t h r e d u c e dc a pa c i t y e ve n i n sho r t b re a kdown pe r i ods .W e c a n me a su re t h i s f l e x i b i li t y by t he a ve r -a g e n u m b e r o f b r e a k d o w n s p e r y e a r , t h ea ve ra ge pe r i od re qu i re d fo r r e pa i r pe r b re a k -down , t he a ve ra ge c a pa c i t y a va i l a b l e fo rp roduc t i on du r i ng t he r e pa ir pe r i od , a nd t hea ve ra ge re qu i re d t i me a nd c os t fo r r e sc he d -u l i ng (a d j us t i ng so f t wa re a nd i n t e rc ha ng i ngt oo l i ng a nd func t i ons be t we e n s t a t i ons ) . S othis f lexib i l i ty va lue ( T C ) c a n be qua n t i f i e dby Eq . (4 ) as t he i nc re a se d re ve nu e whe n t heuse r i mp l e me n t s t h i s f l e x i b i l i t y fo l l owi ngt he j u s t - in - t i me c on c e p t .

N Tnb.T C = ( l - t ) ( 1 + i ) n (4)n =l

w h e r e T C = 0 i f C a = 0 a n d T n = - ~ d m i n{C,e~/,,Qn} + c2 (4-1 )

W e i nc l ude i n t he ope ra t i ng c os t o f t hem a n u f a c t u r i n g s y s t e m t h e e x t r a c o s t o fre sc he du l i ng a f t e r r e pa i r .F l e x i b i l i t y fo r work fo rc e c on t ro l c a n bede f i ne d as t he u se r ' s c a pa b i l i ty t o ma na get he s i z e a nd t e c hn i c a l a nd m a na ge r i a l c a pa -b i l it y o f t he w ork fo rc e r e qu i re d fo r ope ra t i ono f t he ma nu fa c t u r i ng sys t e m. Th i s f l e x i b i l it yc a n be me a su re d by t he s i z e a nd t e c hn i c a la nd ma na ge r i a l c a pa b i l i t y o f t he r e qu i re dw o r k f o r c e ( s p e c i fi e d b y t h e n u m b e r a n dk i n d s o f j o b p e r f o r m e d b y e a c h s ta f f m e m -be r ) a nd by t he a ve ra ge be ne f i t t ha t the u se rcan a t ta in per job . So th i s f lexib i l i ty va lue( w c ) c a n be qua n t i f i e d by E q . (5 ) a s thebe ne f i t t he u se r c a n a t t a i n by i nc re a s i ng t hen u m b e r a n d k i n d s o f j o b t h r o u g h o n - t h e - j o bt ra i n ing du r i ng ope ra t i on o f t he m a nufa c t u r -i ng sys t e m.

N + L, WnW C = ( l - t ) Zn = ~ ( 1 + i ) n ( 5 )

(4)

Al t e rna t i ve l y we c ou l d c a l c u l at e t he be n -e f i ts a s t he i nc re a se d p ro duc t i on a r i s i ng f romt he use r ' s e nha nc e d c a pa b i l it y t o r e a s s ignt a sks i n t he c a se o f work fo rc e a bse nc e . Int h is c a se , w e c a n use a n a p p roa c h s i m i l a r t othe f lexib i l i ty for t rouble cont ro l .F l e x i b i l it y fo r w ork - i n -p roc e s s (W IP ) c on t ro lc a n be de f i ne d a s t he u se r ' s c a pa b i l i t y t omi n i mi z e t he W l P re qu i re d fo r ope ra t i on o ft he ma nufa c t u r i ng sys t e m. Th i s f l e x i b i l i t yc a n b e m e a s u r e d b y t h e a v e r a g e a m o u n t o fW IP re qu i re d fo r ope ra t i on o f t he ma nufa c -t u r i ng sys t e m a nd by t he i nv e n t o ry c a r ry i ng -cos t ra te . So th i s f lexib i l i ty va lue ( IP) c a n bequa n t i f i e d by E q . (6 ) as i nc re a se d c os t , t ha ti s t he a ve ra ge i nve n t o ry c a r ry i ng -c os t o fWIP.

NI P = ( l - t ) ~ c v a Vn(1 + i ) n

n~---I(6 )

3 . T h e m a r k e t i n g a d a p t a t i o n g r o u p i s c a t e go r i z e dby t he u se r ' s c a pa b i l it y t o c ope wi t h t he c ha nge si n m a r k e t d e m a n d , s o f o u r e l e m e n t s b e l o n g t oth is group.(1 ) F l e x i b i l it y fo r c ha nge s i n p roduc t mi x c a n be

de f i ne d a s t he u se r ' s c a pa b i li t y t o a da p t t hema nufa c t u r i ng sys t e m t o ha nd l e c ha nge s i np roduc t mi x a c c o rd i ng t o f l uc t ua t i ons i nm a r k e t d e m a n d . T h e m o d e r n t r e n d i n m a n -u fa c t u r i ng sys t e ms i s t o bu i l d sys t e ms t ha tc a n be a da p t e d t o c ha nge s i n p roduc t mi x , sor e s c h e d u l i n g t h e s y s t e m a c c o r d i n g t oc h a n g e s i n p r o d u c t m i x i s b e c o m i n g t h euse r ' s r e gu l a r j ob . W e c a n me a su re t h i sf l e x i b il i ty by t he a ve ra ge nu mb e r o f c ha nge si n p roduc t mi x pe r ye a r a nd t he a ve ra gere qu i re d t i me a nd c os t fo r r e sc he du l i ng pe rc ha nge i n p roduc t mi x . S o t h i s f l e x i b i l i t yv a l u e ( P M ) c a n b e q u a n t i f i e d a s t h ei nc re a se d c os t by E q . (7 ) .

NZ mn C2P M = ( l - t ) ( 1 + i )"n=l (7 )

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( 2 ) F l e x i b i li t y f o r n e w i t e m i n t r o d u c t i o n c a n b ed e f i n e d a s t h e u s e r ' s c a p a b i l it y t o a d a p t t h em a n u f a c t u r in g s y s t e m t o p r o d u c e n e w i t em s .T o l e s s e n t h e r is k a r i s i n g f r o m a n u n c e r t a i nm a r k e t b y d i v e r s i f i c a t i o n o f p r o d u c t s , t h eu s e r s h o u l d i n t r o d u c e n e w i t e m s i n t h es y s t e m a n d a l t e r t h e p r o c e s s t o p r o d u c et h e m . W e c a n m e a s u r e t h i s fl e x i b il i ty b y t h ea v e ra g e n u m b e r o f n e w i t em s i n t ro d u c e d a n dth e a v e r a g e r e q u i r e d t ime a n d c o s t f o r a l t e r -i n g t h e t o o l i n g , i n t e r c h a n g e , a n d s o f t w a r ep e r n e w i t e m i n t r o d u c t i o n . S o t h i s f l e x ib i l it yv a l u e (NI) c a n b e q u a n t i f i e d a s t h e i n c r e a s e dc o s t b y E q . ( 8 ).

NZ 1.in C3N I = ( l - t ) ( 1 + i ) nn = l ( 8 )

( 3 ) F l e x i b i l i ty f o r u n d e r d e m a n d c o n t r o l c a n b ed e f in e d a s t h e u s e r ' s c a p a b i l i t y t o a d a p t t h em a n u f a c t u r i n g s y s t e m t o h a n d l e t h e s i t u a t i o nw h e r e m a r k e t d e m a n d i s l e ss t h a n t h e c a p a c -i t y o f t h e i n s t a l l e d m a n u f a c t u r i n g s y s t e m .U n d e r d e m a n d o r o v e r d e m a n d d e p e n d s o nt h e g i v e n i n v e s t m e n t p o l i c y a n d i n f o r m a t i o no n m a r k e t d e m a n d , i n p a r t i c u l a r o n t h ec a p a c i t y p l a n ( " c a p a c i t y l e a d s d e m a n d , "" c a p a c i t y i n a p p r o x i m a t e e q u i l i b r i u m w i t hd e m a n d , " o r " c a p ac i ty l ag s d e m a n d " f ol -l o w i n g t h e s e q u e n t i a l i n v e s t m e n t p o l i c y ) a n dt h e r e li a b i li t y o f t h e i n f o r m a t i o n . W h e nu s e r s f a c e t h e u n d e r d e m a n d s i t u a t i o n , t h e yc a n r e s c h e d u l e t h e m a n u f a c t u r i n g s y s t e mu s i n g t h e m i n i m a l a m o u n t o f e q u i p m e n t ( o rc a p a c i t y ) t h a t c a n p r o d u c e t h e r e d u c e dd e m a n d , a n d t h e y c a n t r a n s f e r t h e e x c e s sc a p a c i t y o f s o m e e q u i p m e n t ( o r e x c e s se q u i p m e n t ) f o r a n o t h e r u s e . S o w e c a nm e a s u r e t h i s f l e x i b i l i t y b y t h e a v e r a g ea m o u n t o f e x c e s s c a p a c i t y ( o r t h e a v e r a g ea m o u n t o f e x c e s s e q u i p m e n t ) t h a t c a n b et r a n s f e r r e d f o r a n o t h e r u s e a n d t h e a v e r a g er e q u i r e d t i m e a n d c o s t f o r r e s c h e d u l i n g .F l e x ib i l i t y v a lu e (UC) c a n b e q u a n t i f i e d b yE q . ( 9 ) a s t h e i n c r e a s e d r e v e n u e t h a t c a n b ep r o d u c e d d u r i n g t h i s p e r i o d u s i n g e x c e s sc a p a c i t y o r e q u i p m e n t a n d t h e a v e r a g er e q u i r e d c o s t .

(4 )

NU C = - ( 1 - t ) [~ y ,

8 , ( M ~ - Q n ) C t c 2(1 + i)n -- (1 + i) ~] (9 )w h e r e i f Qn / Mn 0 ; o t h e r w i s e w e s e tU C = O .F l e x i b i l i t y f o r o v e r d e m a n d c o n t r o l c a n b ed e f in e d a s t h e u s e r ' s c a p a b i l i t y t o a d a p t t h em a n u f a c t u r i n g s y s t e m t o h a n d l e t h e s i t u at i o nw h e r e m a r k e t d e m a n d e x c e e d s t h e c a p a ci t yo f t h e i n s t a ll e d m a n u f a c t u r i n g s y s t e m . W h e nu s e r s f a c e t h e o v e r d e m a n d s i t u a ti o n , t h e yw i l l d e c i d e w h e t h e r to i m p l e m e n t in c r e m e n -t al i n v e s t m e n t o r n o t a n d a l s o w h e t h e r t od e l i v e r t h i s e x c e s s d e m a n d b y s u b c o n t r a c tp r o d u c t i o n o r n o t . So t h i s f l e x ib i l it y c a n b em e a s u r e d b y t h e l e a d t i m e a n d c o s t o fi n c r e m e n t a l i n v e s t m e n t a n d t h e a v e r a g ee x t r a c o s t o f t h e s u b c o n t r a c t p r o d u c t i o n t of u l fi l l t h e e x c e s s d e m a n d o r e l s e b y t h e c o s tt h a t a r i s e s f r o m th e l o s t s a l e . So t h i s f l e x i -b i l i t y v a lu e (OC) c a n b e q u a n t i f i e d a s t h ein c r e a s e d c o s t b y E q . ( 1 0 ) .

j + A LO f = ( l - t ) Ln = jr n e ( Q , ~ - M n ) . I i + , x Li+P *(1 (10)j = m in { n I Q n > M , , , 1 - n < N } ( 1 0 - 1 )w h e r e I j+ a/~ = i n c r e m e n ta l i n v e s tm e n t , A L= l e a d t ime ( in y e ar s ) o f i n c r e m e n ta l i n v e s t -m e n t , a n d % = 1 if ( Qn- M, , ) > 0 , e l se "rn =0 . W h e n t h e g iv e n s t r a t e g y i s t h e d e l i v e r y o fe x c e s s d e m a n d b y s u b c o n t ra c t p ro d u c t i o n , ei s t h e a v e r a g e e x t r a c o s t o f e x c e s s d e m a n d f o rs u b c o n t r a c t p r o d u c t i o n . W h e n t h e g iv e n s t ra t -e g y i s n o n d e l i v e r y o f e x c e s s d e m a n d , e i s t h ec o s t t h a t a r i s e s f r o m th e l o s t s a l e . W h e n n oin c r e me n ta l i n v e s tme n t t a k e s p l a c e , t h e n j +A L i s r e p l a c e d b y N i n t h e s u m m a t i o n .

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Journal of ManufacturingSystemsVolume 13/No. 2

A p p l i c a t io n t o T e s t C a s eW e n e x t a p p l y o u r m e t h o d t o a te s t c a s e , s e l e c t -

i n g a n a u t o m a t e d m a s s m a n u f a c t u r i n g s y s t e m f o r ap a s s e n g e r c a r m a n u f a c t u r e r in K o r e a . W e s u p p le -m e n t r e a l d a t a w i t h s o m e p o s t u l a t e d d a t a f o r r ea l i z-a b l e f l e x i b i l i t y t o f a c i l i t a t e t h e c a l c u l a t i o n o f f l e x i -b i l i t y v a l u e .

F i n a n c i a l E v a l u a t i o n M o d e lW e w i l l u s e a f i n a n c i a l e v a l u a t i o n m o d e l w i t h a

d e c i s i o n c r i t e r i o n b a s e d o n p r e s e n t w o r t h . T h i s c r i -t e f l o n i s s u p e r i o r t o t h e t r a d i t i o n a l m e a s u r e s o fi n v e s t m e n t w o r t h b e c a u s e o f i ts e a s e o f u s e , r o b u s t -n e s s , a n d c o n s i s t e n c y , a 6 A s i n t h i s c a s e , w h e n t h eu s e r w a n t s t o a d o p t t h e i n c r e m e n t a l i n v e s t m e n tp o l i c y b a s e d o n m a r k e t i n f o r m a t i o n g i v e n i n s t o -c h a s t i c f o r m , t h e d e c i s i o n t r e e m o d e l i s s u i t a b le f o rd e s c r i b i n g t h e s i t u a ti o n a s w e l l a s b e i n g t r a c t a b l e t oana ly s i s . 37 ,as

T h e i n v e s t m e n t ( o r e x p e n d i t u r e ) f o r a n a l te r n a t i v ec a n t h e n b e e s t i m a t e d i n t h e s t a n d a r d m a n n e r a sp r e s e n t w o r t h b y E q . ( 1 1 ) .

N N'n Z "On= : '~ n -1 - { -P W ( ) ( 1 + j (1 + i )"n = l n = l

N~ 1 t D n t B N ( l - t ) S= ( 1 + i ) " ( 1 + i ) N ( 1 + i) N ( 1 1 )

w h e r e I is i n v e s t m e n t c o s t, O i s o p e r a t i n g c o s t , D i sd e p r e c i a t i o n c o s t , B i s b o o k v a l u e , S i s s a l v a g ev a l u e , s u b s c r i p t n m e a n s n t h y e a r , a p o s i t i v e s i g nm e a n s o u t f l o w o f c a s h ( c o s t ) , a n d a n e g a t i v e s ig nm e a n s i n f lo w o f c a s h ( r e v e n u e ) .

T h e a g g r e g a t e o f t h e f l e x i b il i ty v a l u e s c a l c u l a t e df r o m E q s . ( 1 ) to ( 1 0 ) c a n t h e n b e a d d e d t o P W ( ) toy i e l d t h e t o t a l i n v e s t m e n t .

e x c e p t f o r m i n o r d i f f e r e n c e s i n b o r e s i z e a n d p o s i -t i o n o f j o i n i n g h o l e s , w e p r o p o s e t h r e e k i n d s o fm a n u f a c t u r i n g l in e s ( s y s t e m s ) , e a c h o f w h i c h c a nm a c h i n e f o u r o p t io n s w i t h o u t s to p p i n g t h e m a n u -f a c t u r i n g l i n e f o r c h a n g i n g j ig s a n d f i x t u r e s ( s e eTable 4) . A l s o , m a c h i n i n g t i m e o f al l f o u r o p t i o n s i sa l m o s t t he s a m e , s o w e n e e d n o t c o n s i d e r t h e m i x e dr a t e o f t h e f o u r o p t i o n s f o r c a p a c i t y p l a n n i n g .2 . M a r k e t I n f o r m a t i o n

D e m a n d d a t a a r e p r o v i d e d p r i o r t o s e l e c t i o n o ft h e m a n u f a c t u r i n g l i n e f r o m a m o n g t h e a v a i l a b l eo p t i o n s . W e s u p p o s e f i v e p o s s i b l e s c e n a r i o s o r" d e m a n d s t a t e s , " w h i c h w e l ab e l k = 1 , 2 . . . . . 5 ,e a c h w i t h p r o b a b i l i ty P k = 0 . 2 . D e t a i l e d f i g u r e s f o re a c h d e m a n d s t a t e a r e s h o w n i n T able 3 .

W e a s s u m e t h a t a d d i t io n a l d a t a w i ll b e p r o v i d e do n e y e a r a f te r m a r k e t i n t r o d u c t i o n o f p r o d u c t s , o nt h e b a s is o f w h i c h t h e f i n a l d e c i s i o n w i ll b e m a d ea b o u t w h e t h e r o r n o t t o e x t e n d p r o d u c t l if e b e y o n dt h e b a s i c f i v e y e a r s .3 . A l t e r n a t iv e s f o r P r o p o s e d M a n u f a c t u r i n g

L i n e sM a n u f a c t u r i n g l i n e s p r o p o s e d f o r t h i s p r o j e c t a r e

c l a s s i f i e d i n T able 4 , a n d a l t e r n a t iv e s c o n s i d e r e d f o re a c h m a n u f a c t u r i n g l i n e a r e s h o w n i n F igure 2 .A d d i t i o n a l d a t a f o r p o t e n t i a l f l e x i b i l i t y a n d t h ec a p a c i t y p l a n f o r e a c h m a n u f a c t u r i n g li n e a r e s h o w nin Tables 8 a n d 9 i n t h e A p p e n d i x .

Table 3D a t a on M a r k e t D e m a n d

T h e s t a t e of m a r k e t d e m a n d :s t a t e k , i t ' s I ro ab ab i l i t y P ~ , p r o d u c tl i f e N , a n d t o t a l d e m a n d T Q

A n n u a l d e m a n d Q ~

1 2 3 4 5 6 7 8 9 1 0st~tekl Pk i N [ To1 i 0.2 i s [ 4o0 3o 80 ll5 115 6o2 i 0 . 2 ~ 5 i 5 0 0 4 0 1 0 0 1 4 0 1 4 0 8 03 i 0 . 2 i 8 i 1 , 1 00 5 0 1 1 0 1 6 5 1 8 5 1 8 5 1 8 5 1 5 0 7 0 _ _4 1 0 . 2 1 8 ! 1 , 3 00 6 0 l l 0 1 8 0 2 3 0 2 3 0 2 3 ~ 1 7 0 9 05 i 0 . 2 i 1 0 ] 1 , 7 00 6 0 1 1 5 l f f 5 2 3 0 2 3 0 2 3 0 1 8 0 1 6 0 8 0

I n p u t D a t aW e w i ll u s e m i l li o n s o f K o r e a n w o n a s t h e

m o n e t a r y u n i t a n d 1 0 0 0 p i e c e s a s t h e u n it o f c a p a c i t ya n d d e m a n d f o r a ll i n p u t d a t a a n d c a l c u l a ti o n s .I . S p e c i fi c a t io n o f P r o d u c t s

T h e p r o d u c t i s a p a s s e n g e r c a r t r a n s m i s s i o n g e a rb o x t h a t h a s f o u r o p ti o n s : s t a n d a r d / h i g h h o r s e p o w e ra n d 4 - 5 s p e e d s . B e c a u s e a l l f o u r o p t i o n s a r e s i m i l a r

Table 4C l a s s i f i c a ti o n o f P r o p o s e d M a n u f a c t u r i n g L i n e s

T y p e N a m e S p e c i f ic a t i onT h e t r a d i t i o n a l m a s sm a n u f a c t u r i n g s y s t e mT h e f l e x i b i l y a u t o m a t e dm a s s n m n u f a c t u r in gs y s t e m

A d e d i c a t e d d e s i g n o n l y f o r o n eT L : H a r d t y p e t r a n s f e r l in e p r o ) e c tF M L : F l e x i b le m a n u f a c a u ~ n g l i ne A f l e x i b le m a n u f a c t u r i n g s y s t e ms p e c i a l l y b u i l t f o r m a s s p r o d u c t i o nM M L : M o d u l a r m a n u f a c t u r i n g l in e N e w t r e n d u t i li z i n g m o d u l a r c o n c e p t

11 4


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Journal of Manufacturing SystemsV o l u m e 1 3 / N o . 2

I ~ . l u m . m t t/ N = 5 , T Q = 4 0 0 , P l = 0 . 2

/ _ , ~ N = 5 , T Q = 5 00 , P 2 = 0 . 2/ T L ~ - - - - ' - - ' - - N = 8 , T Q = 1 , 1 0 0. P 3 = 0 , 2

/ ~ S = 8 , T Q = 1,300oP4 = 0.2~ N = 1 0 , T Q = 1 , 7 0 0 , P 5 = 0 . 2

/ ~ N = 5 , T Q = 4 0 0 . P I = 0 . 2/ - -

r ~ F l - - l ( ' . ~ - - t J . O ~ N = s , r Q = ~ o , P ~=O .Z~ = ~ F 1 d I . ,k - - ~ . . . . ~ N = 5 . T Q = 5 0 0 . P 2 = 0 . 2~ k w 7 ~ - ~ / N = 8 . T Q = l , I 0 0 . P 3 = 0 . 2

X t ' X ~ N = 8 " T Q = 1 , 3 00 , 4 = 0 . 2~ N = 1 0 , T Q = 1 , 7 0 0 , P S = 0 . 2

~ % ~ N = 5 . T Q = 4 0 0 . P l = 0 . 2v ~ N = 5 , T Q = 5 0 0 , ! > 2 = 0 . 2

MML--J["~ Ai .- . / N=S. TQ= 1a00.~=0.2F i n a l d e c i s i o n b M e d o n a d d i t i o n = l h t t ~ ~ - - - - ~ N = 8 , T Q = 1 , 3 0 0 , P 4 = 0 . 2a t 1 y e a r a l ~ r m a r k e t i n t r o d u c ti o n [ " ~ N = 1 0 , T Q = 1 , 7 0 0 , P S = 0 . 2

Fi g u re 2A l t e rn a t i v es f o r E a c h M a n u f a c t u r i n g L i n e a n d A s s o c i a te dD e m a n d S t a t e s

C a l c u l a t i o n o f P r e s e n t W o r t h o f I n v e s t m e n tP r e s e n t w o r t h o f i n v e s t m e n t f o r t h e d e m a n d s t at e

k ( s e e Table 3) o f e a c h a l t er n a t iv e , w h i c h w e s h a l ld e n o t e P W k ( ) , i s c a l c u l a t e d b y E q . ( 1 1 ) . R e s u l t s a r es h o w n i n Table 5 . The r e q u i r e d o p e r a t i o n a n dd e p r e c i a t i o n c o s t s a r e g i v e n i n Tables 10 a n d 11 int h e A p p e n d i x .

Table 5P r e s e n t W o r t h o f I n v e s t m e n t f o r D e m a n d S t a t e k o f E a c h

A l t e r n a t i v e : PWk OT h e s t a te o f - P r e s e n t w o r t h o f i n v e s t m e n tm a r k e t d e m a n d F M L M M L

N i T Q T L F F 1 F 2 A A 15 { ~ 2 r 2 7 0 . 5 1 , 2 4 5 . 9 I , 4 5 3 . 8 1 , 3 3 9 . 4S [ 5 0 0 2 ~ / 4 . 8 1 , 2 5 4 . 6 1 , 4 8 4 . 4 I)361.28 i 1 ,1 0 0 2 5 2 9 .6 2 ,7 4 5 .1 2 ' 5 9 2 .38 [ 1 , , 3 0 0 2 / 5 6 1 .2 2 ' 8 1 7 .1 2 ' 6 2 8 3

1 0 [ 1 ,7 0 0 2 ,6 7 2 . 7 3 ,1 2 5 . 2 2 ,8 7 8 .8

Table 6Q u a n t i f ie d F l e x i b i l i ty V a l u e f o r D e m a n d S t a t e k o f E a c h

A l t e r n a t i v e~ value 1. 2 .

I n v e s t m e n t I n t e r n a l c o n t r o lA l t e r n a ti v e s ~ p o l i c ya / ~ n~ d e ~ V ~d s t a ~ ' ~ . 1 2 3 I 2 3 4

L i n e I ~ k N T Q $ 1 PA NP C [ " I ~ W C I P1 5 4 0 0 2 0 5 - 2 5 4 .1 1 6 0 .7 0 0 02 .5 - 5 0 0 2 0 5 -254.7 100.7 0 0 0

TL 3 8 1 ,100 0 20 .8 383 169.7 0 ' 0 04 8 1,300 20.8 -3 ~3 168.7 0 0 05 10 1,700 20.8 0 160.7 0 0 0I 5 4 0 0 I Z8 - 2 9 ~ 1 0 1 5 - 4 .2 0 0F n2 5 5 0 0 2.8 - 2 9 . 6 1 0 1 . 8 -7.0 0 0-- c1 5 4 0 0 I Z 8 - 4 ? . 4 1 0 1 . 8 - 6 5 0 0F I u2 5 500 d 2=8 -47.4 1 0 1 5 - 1 0 g 0 0F M L - - 3 8 1 ,1 0 0 e 28 -2 0 .1 1 1 4 .9 -3 2 .5 0 0d4 8 1 , .. ~ 0 2 .8 - 2 0 .1 1 1 4 .9 - 3 5 .8 0 0F 2 5 10 1 ,700 i 2~ 0 114.9 -46 .2 0 0n1 5 4 0 0 0 4 .7 8 4 .9 -9.9 0 0A T2 5 5 0 0 a 0 4.7 8 4 .9 -1 5 .0 0 03 8 1 ,100 b 0 4 .9 98 .0 - 43_1 0 0M M L 4 8 1 .3 0 0 I 0 4 9 98.0 -493 0 0

eAI 5 10 1 ,700 7 0 0 98 .0 -63 .0 0 0

3.M a r k e t i n g a d a p t a t i o n T o t a l1 i 9 3 4 ( F V , )P M N I U C O [email protected] 45.1 N/A N /A 26.34 5 = 5 4 5 .1 N/ A N/ A 26.36 4 7 8 .9 N/ A N/ A ~ I6 4 7 5 9 N/ A N/ A 2 ~ 17 3 . 7 7 8 . 9 N / A N / A 3 ~ q. 19 9 .7 2 2 .5 - 5 8 .3 N/ A 5 7 .72 2 .1 2 2 5 -39.7 64.5 138.12 2 .7 2 9 ~ 5 1 5 6 .9 N / A - 6 1 .22 2 . 7 2 2 . 5 6 ~ . 9 N / A 2 9 .64 5 .0 6 3 .2 4 ? 7 .3 N/A -304.04 5 .0 6 1 2 - 2 4 8 .8 N/ A 7 8 .95 ~ .71 6 3 .2 - 2 7 4 .2 N/ A 0 0 52 2 . 7 2 2 5 - 1 0 0 . 7 N / A - 5 3 52 2 . 7 2 Z 5 -76 .0 N/A 43.8~i.0 55 ..3 5735 N/A -413.645.01 55.3-299.3 N/ A -145.552.71 5&31-329.8 N /A -100.8

Q u a n t i f i c a t i o n o f F l e x i b il i t y V a l u eF l e x i b i l i t y v a l u e f o r e a c h a l t e r n a t i v e i s c a l c u l a t e df o r e a c h d e m a n d s t a te k u s i n g E q s . ( 1 ) t o (1 0 ) ; t h e i rs u m i s r e f e r r ed t o a s t h e t o t a l f l e x i b i l i t y v a l u e (FVk).T h e r e s u l t s a r e g i v e n i n Table 6 . T h e d a t a u s e d i nt h i s c a l c u l a t i o n a r e s e t o u t i n Table 12 i n t h eA p p e n d i x . R e c a l l t h at t h e p o s i t i v e s i g n m e a n so u t f l o w o f c a s h ( c o s t ) .D e c i s i o n M a k i n g b y t h e C r i te r i o n o f E x p e c t e dT o t a l In v e s t m e n t o f M a n u f a c t u r i n g L i n e

In Table 7 , p ar t A , w e s h o w t h e e x p e c t e di n v e s t m e n t ( E [ P W ( ) ] ) f o r t h e t h r e e m a n u f a c t u r i n gl i n e s . A s c a n b e s e e n , M M L i s s e l e c t e d b y t h i sp r o c e du r e ; h o w e v e r , t h e re s u l t i s l e s s c l ea r - c u t w h e nw e g o o n t o s u p p l e m e n t t h e c a l c u l a t i o n f o r r i s ka n a l y s i s . R e s u l t s a r e g i v e n i n Figure 3; i n n o c a s ed o e s M M L h a v e t h e m i n i m u m p r e s en t w o r t h .

I f i n s t e a d t h e q u a n t i f i e d t o t a l f le x i b i l i t y v a l u e F Vki s a d d e d t o t h e p r e s e n t w o r t h o f i n v e s t m e n t P W k ( ) ,t h e n t h e e x p e c t e d t o t a l i n v e s t m e n t ( E [ P W ( ) +

F V ) ] f o r e a c h m a n u f a c t u r i n g l in e i s g i v e n i n Table 7,p a r t B . O n c e a g a i n M M L i s s e l e c t e d ; h o w e v e r , i tw i l l b e n o t e d f r o m t h e in c r e a s e d d i f f e r e n c e b e t w e e nt h e e x p e c t e d t o t a l i n v e s t m e n t f o r M M L a n d F M La n d f r o m t h e d o w n w a r d t r e n d o f t h e i r s t a n d a r d

* d e v i a t i o n s t h a t t h e r e l i a b i l i t y o f o u r c o n c l u s i o n h a sc l e a r l y b e e n e n h a n c e d b y i n c o r p o r a t i o n o f f l e x i b i l -i t y v a l u e i n t o t h e c a l c u l a t i o n . C o r r e s p o n d i n g r e s u l t sf o r r is k a n a l y s i s a r e g i v e n i n Figure 4 . W e f i n d t h a t,w i t h p r o b a b i l it y 0 . 8 , M M L n o w h a s t h e m i n i m u mt o t a l i n v e s t m e n t .

C onc l us i ons a nd D i s c us s i onO u r a p p r o a c h t o f l e x i b i l i t y i n m a s s m a n u f a c t u r -

i n g s y s t e m s w a s t o a n a l y z e i t s e p a r a t e l y f r o m t h es y s t e m m a n u f a c t u r e r ' s a n d u s e r ' s p o i n t o f v i e w a sp o t e n t i a l a n d r e a l i z a b l e f l e x i b i l i t y . W e c l a s s i f i e d t h ef o r m e r i n t o f o u r e l e m e n t s a n d t h e l a t t e r i n t o t h r e eg r o u p s a n d fu r t he r i n t o 1 1 e l e m e n t s . W e s u g g e s t e da m e t h o d f o r q u a n t i f y i n g r e a l i z a b l e f l e x i b i l i t y i n

11 5


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3. J. Ranta and I. Tchijov, "Economics and Success Factors ofFMS: The Conventional Explanation Revisited," The InternationalJournal ofFMS (n2, 1990), pp169-190.4. L.H. Roller and M.M. Tombak, "Strategic Aspect of FlexibleProduction Technologies: Theory and Evidence ," International Jour-nal of Production Economics (v23, 1991), pp 197-204.5. J.W. Troxler and L. Blank, "A Comprehensive Methodology forManufacturing System Evaluation and Comparison," Journal ofManufacturing Systems (v9, n3, 1990), pp175-183.6. D. Gupta and J.A. Buzacott, "A Framework for UnderstandingFlexibility of Manufacturing Systems," Journal of ManufacturingSystems (v8, n2, 1989), pp89-97.7. J.H. Hyun and B.H. Ahn, "Manufacturing Flexibility: Classifi-cation, Unifying Framework and Uncertainty Strategy," Manufactur-ing Review (accepted for publication).8. A.K. Sethi and S.P. Sethi, "Flexibility in Manufacturing: ASurvey," International Journal of FMS (v2, 1990), pp289-328.9. J.H. Hodder and H.E. Riggs, "Pitfalls in Evaluating RiskyProjects," Harvard Business Review (Jan.-Feb. 1985), pp128-135.10. R.S. Kaplan, "Must CIM Be Justified by Faith Alone?" HarvardBusiness Review (Mar.-Apr. 1986), pp87-95.11. I. Krinsky and J. Miltenburg, "Alternate Method for the Justifi-cation of AMT (Advanced Manufacturing Technologies)," Interna-tional Journal of Production Research (v28, n9, 1990), pp997-1015.12. J.G. Demmel and R.G. Askin, "A Multiple Objective DecisionModel for the Evaluation of Advanced Manufacturing System Tech-nologies," Journal of Manufacturing Systems (vll, n3, 1992),pp179-194.13. Y.K. Son, "A Decision Support System for Factory Automation:A Case Study," International Journal of Production Research (v29,n7, 1991), pp1461-1473.14. A. Stam and M. Kuula, "Selecting a FMS Using MultipleCriteria Analysis," International Journal of Production Research(v29, n4, 1991), pp803-820.15. N.C. Suresh, "An Extended Multi-Objective Replacement Modelfor Flexible Automation Investments," International Journal of Pro-duction Research (v29, n9, 1991), pp1823-1844.16. S. Venk, "Strategic Optimization Cycle as a Competitive Toolfor Economic Justification of AMT," Journal of ManufacturingSystems (v9, n3, 1990), pp194-205.17. R.N. Wabalickis, "Justification of FMS with the AHP (AnalyticHierarchy Process)," Journal of Manufacturing Systems (v7, n3,1988), pp175-182.

18. M.S. Zahir, "Incorporating the Uncertainty of Decision Judg-ments in the AHP," European Journal of Operational Research (n53,1991), pp206-216.19. G. Azzone and U. Bertele, "Measuring the Economic Effective-ness of Flexible Automation: A New Approach," InternationalJournal of Production Research (v27, n5, 1989), pp735-746.20. G.K. Hutchinson, "Production Capacity: CAM vs. TransferLine," Industrial Engineering (Sept. 1976), pp30-35.21. G.K. Hutchinson and J.R. Holland, "The Economic Value ofFlexible Automation," Journal of Manufacturing Systems (vl, n2,1982), pp215-228.22. G.K. Hutchinson and D. Sinha, "A Quantification of the Valueof Flexibility," Journal of Manufacturing Systems (v8, nl, 1989),pp47-57.23. Y.K. Son, "An Economic Evaluation Model for AdvancedManufacturing Systems," PhD Dissertation (Auburn, AL: AuburnUniversity, 1987).24. Y.K. Son and C.S. Park, "Economic Measure of Productivity,Quality and Flexibility in Advanced Manufacturing Systems," Jour-nal of Manufacturing Systems (v6, n3, 1987), pp193-206.25. Y.K. Son and C.S. Park, "Quantifying Opportunity CostsAssociated with Adding Manufacturing Flexibility," InternationalJournal of Production Research (v28, n6, 1990), pp1183-1194.26. Y.K. Son, " A Cost Estimation Model for Advanced Manufac-turing Systems," International Journal of Production Reserach (v29,n3, 1991), pp441-452.27. N.C. Suresh, "Towards an Integrated Evaluation of FlexibleAutomation Investment," International Journal of ProductionResearch (v28, n9, 1990), pp1657-1672.28. P. Chandra and M.M. Tombak, "Models for the Evaluation ofRouting and Machine Flexibilit y," European Journal of Operational

Research (v60, n2, July 1992), pp156-165.29. J.R. Dixon, "Measuring Manufacturing Flexibility: An EmpiricalInvestigation," European Journal of Operational Research (v60, n2,July 1992), pp131-143.30. R. Jaikumar, "Postindustrial Manufacturing," Harvard BusinessReview (Nov.-Dec. 1986), pp69-76.31. P.M. Swamidass and M.A. Waller, "A Classification ofApproaches to Planning and Justifying New Manufacturing Technol-ogies," Journal of Manufacturing Systems (v9, n3, 1990), pp181-193.32. Y.P. Gupta and T.M. Somers, "The Measurement of Manufac-turing Flexibility," European Journal of Operational Research (v60,n2, July 1992), pp166-182.33. S. Kotha and D. Ome, "Generic Manufacturing Strategies: AConceptual Synthesis," Strategic Management Journal (vl0, 1989),pp211-231.34. P.M. Swamidass and W.T. Newell, "Manufacturing Strategy,Environmental Uncertainty and Performance: A Path AnalyticModel," Management Science (v33, n4, 1987), pp509-524.35. Y.S. Pyoun and B.K. Choi, "Quantifying Flexibility Value inAutomated Manufacturing Systems," Working Paper (Taejon, Korea:Korea Advanced Institute of Science and Technology, 1992).36. C.S. Park and G.P. Sharp-Bette, Advanced Engineering Econom-ics (New York: John Wiley & Sons, 1990), p237.37. C.S. Par k and G.J. Thuesen, "Combining the Concepts ofUncertainty Resolution and Project Balance for Capital AllocationDecisions," The Engineering Economist (v24, n2, 1979), ppl09-127.38. G.C. Prueitt and C.S. Park , "Incremental Automation withSampling Applied to an Advanced Manufacturing System," TheEngineering Economist (v35, n4, 1990), pp255-294.39. C.S. Park and G.P. Sharp-Bette, Advanced Engineering Econom-ics (New York: John Wiley & Sons, 1990), pp379-380.

AppendixTab l e 8D a t a f o r P o t e n t i a l F l e x i b i l i t y

C o n t e n t sI n i t i a l i n v e s t m e n t :m a x . c a p a c i t y ( M )a n d c o s t ( C )I n c r e m e n t a l i n v e s t m e n t :c a p a c i t y ( A M a n d c a s t ( h C )I n i t i a l i e a d t i m e ( L )I n c r e m e n t a l l e a d t i m e ( E L )

T L

M = 2 5 0 - - > C = 3 . ~ 0

N / AL= 2 years

N /A

F M LM = 1 2 5 - - > C = I , 8{ DM : 1 5 0 - - > C = 2 , ~ 00M = 2 5 0 - - > C = 3 ,6 0 0h M = 2 5 = - > A C = 6 0 0A M = 1 2 5 - = > ~ C : 1 , 8 0 0L 2 y e a r sA L = I y e a r

M M LM = I E 0 - - > C = 2 , 1 0 0M = 2 f i 0 - - > C = 3 . 6 0 0~ M = I C 0 - - > C = I ~ 0 0

L = 2 y ~ sA L = 1 y e a r

Tab l e 9C a pa c i t y P l a ns f o r Ea c h Ma nuf a c t ur i ng L i ne ( A v a i l a b l eA l t e r na t i v e s )l ' h e s t a t e o f

m a r k e t d e m a n d F M Lk i N ! T Q T L A I i C a p a c i t y ( M . ) & I n v e s t m e n t" ~ t ' i ( ~ ) i n t h e n t h y e a r1 : . 5 i 4 9 0 o r F1 "Varee ~ ' a l temat i v es

i i F1 i Ma: 1 5 0 (M1 : 1 2 5 , A M : 2 5 )3 i 8 i ,I0 0 h:M1:3,000250' i h (h C) ~6 004 i 8 ! 1 ,3 0 0 F2 i IVY: 2 5 0 (M1 : 1 2 5 , h M: 1 2 5 )1,700 i b ~c~: .~o

C a p a c i t y p l a n s o f e a c h m a n u f a c ~ l i ne ( a v a i la b l e a l t e r n a ti v e s )M M LA l L i C a p a c i t y ( M D & I n v e s t m e n t

i ( h ) i n t h e n t h ~ , e a ri T w o a l t e r n a ti v e si M l : l S 0 , 1 1 : 2 , 1 0 0

A I;AI i / v i a : 2 5 0 (M1 : 1 2 5 , AM: 1 2 5 )

b ( ~ ) : 1 , S~ O

117


11/11

Journal of Manufacturing SystemsVolume 13 /No. 2

T abl e 10E s t i m a t e d O p e r a t i o n C o s t f o r D e m a n d S t a t e k o f E a c hA l t e r n a t i v e

T h e s t a t e o f O p e r a ti o n c o s t o f ~ c h a l te r n at i vem a r k e t d e m a n d F M L

N! TQ TL F FI F'21 5 i 400 288 336 308 N /A2 5 i 500 296 352 364 N/A3 8 i I ,I00 5 7 6 N / A N / A 90 84 8 i 13110 634 N/A N/A 1,0405 10 i 1,700 816 N/A N/A lf l fi0

I M M LA A I

3 1 ~ N / A3 4 8 N / AN /AN / A 6 ~N / A 8 6 0

Table 11D e p r e c i a t i o n o f E a c h A l t e r n a t i v e

D e p r e c i a t i o n T L F M L M M Lin n t h y e a r F F I F 2 A A 1

I)1 z 20~5 202.5 202.5 236.3 2363D~-s 33'7.5 270 4415 236.3 405D 6 -8 N / A N / A 4 0 5 N / A 4 0 6l)~-t~ 33.8 222 ~ 192.4

Authors ' B iographiesY o u n g - S h i k P y o u n i s a n a s s i s t a n t p r o f e s s o r o f m e c h a n i c a le n g i n e e r i n g a t S u n M o o n U n i v e r s i t y . H e r e c e i v e d a B S i nm e c h a n i c a l e n g i n e e r in g f r o m t h e K o r e a C i v i l A v i a t i o n C o l l e g e a n da n M S i n m e c h a n i c a l e n g i n e e r i n g f r o m Y o n s e i U n i v e r s i t y , b o t h i nm e c h a n i c a l e n g i n e e r i n g , a n d a P h D i n i nd u s tr ia l e n g i n e e r i n g f r o mt h e K o r e a A d v a n c e d I n s ti tu t e o f S c i e n c e a n d T e c h n o l o g y ( K A I S T ) .He a lso has 15 years o f industr ia l exper ience in severa l di f f erente n g i n e e r i n g a r e a s a t t h e S a e i l H e a v y I n d u s tr y C o . , L t d . , w h i c h

p r o d u c e s m a c h i n e t o o l s , a u t o m a t e d m a n u f a c t u r i n g s y s t e m s ,a u t o m o t i v e p a r t s ( t r a n s m i s s i o n a s s e m b l y , a x l e a s s e m b l y a n d s t e e r i n g

Table 12D a t a f o r C a l c u l a t i n g R e a l i z a b l e F l e x i b i l i t y

~ t o r .N o. N o m e n . ~1 i2 t3 I~

clP ~

7 P~8 P ~9 N=

l0 r~11 b~12 c213 C=14 d15 a16~ 7 ~ w o18 1.19 c,21 ra~22 nn23 c324 G25 k26 B27 s2 8 O ~2 9 M .30

T L

0. 15O

100

F t FI I 17210 96

M M L

4 0 %C a l c u l a t e d u s i n g T a b l e s 9 a n d I I

P, e -4).0235

0. 10.5

10r l 3 = 2, r4 = ]

b l = 3 , ~ - ~= 2 , I ~ l o ~35 i 8 5 I s6 0 % 7 0 %

0.010.01

Th e t w o ~e , f i b i l i t i e s WC an d I P w e r e n o t a l ~ l i e d t o t h e t e s t c a s e ,s o v a l u e s we r e n o t a s s i g n e d t o v a r i a b l e s 16-20.

m l ~ = 2na=l,i 116 = 1 [loo [ 50 s~ g--F 700 5 0 % 6 0 %

0.90.0063

S a m e a s T a b l e 3S a m e a s T a b l e 9

0.006

assem bly of t rucks and cars) , and so on. His re search intere s ts arei n t h e a r e a s o f e c o n o m i c a l a n a l y s i s o f f l e x i b l e a u t o m a t i o n o fm a n u f ac t ur i ng s y s t e m s , d i sc r et e e v e n t s y s t e m m o d e l i n g a n ds i m u l a t i o n , a n d m a n u f a c t u r i n g s y s t e m d e s i g n .B y o u n g - K y u C h o i i s a p r o f e s s o r o f i n d u s t r i a l e n g i n e e r i n g a t t h eK o r e a A d v a n c e d I n s t it u te o f S c i e n c e a n d T e c h n o l o g y ( K A I S T ) . H er e c ei v e d a B S f r o m S e o u l N a t i on a l U n i v e r s it y , a n M S f r o m K A I S T ,a n d a P h D f r o m P u r d u e U n i v e r s i t y , a l l i n i n d u s tr i al e n g i n e e r i n g . H i scurrent re search intere s ts inc lud e sur face mo de l i ng , CA D/ CA M ,

C A P P , d i s c r e t e e v e n t s y s t e m m o d e l i n g a n d s i m u l a t i o n , a n d m a n u f a c -t u r i n g s y s t e m d e s i g n .

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17.Quantifying the Flexibility Value in Automated Manufacturing Systems

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