Economic Justification for Incremental Implementation of Advanced Manufacturing Systems

Vahid Lotfi, Joseph Sarkis, and John Semple

Journal of the Operational Research Society, Vol. 49, No. 8, pp. 829-839, 1998

The strategic decision to integrate Advanced Manufacturing Systems (AMS) within a traditional production system has become an attractive and sometimes necessary alternative in many industrial settings. The purpose of this paper is to develop a model that focuses on this particular decision-making problem. Simplifications and approximations introduced at the operational level permit two key issues to be addressed: (1) where should AMS be implemented and (2) when should this implementation occur. The model is shown to have good structure for a simplified analysis, thus making it particularly useful in instances where only rough estimates of costs are available and extensive "what if" type analyses are therefore required.


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