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| Author: | Monahan, G. E. Smunt, T. L. |
| Title: | Optimal acquisition of automated flexible manufacturing processes. |
| Journal: | Operations Research
1989 : MAR-APR, VOL. 37:2, p. 288-300 |
| Index terms: | FLEXIBLE MANUFACTURING SYSTEMS DYNAMIC PROGRAMMING DECISION MODELS PROJECT EVALUATION |
| Language: | eng |
| Abstract: | A dynamic, stochastic optimization model of the automated flexible manufacturing investment decision process is developed. The decision process model explicitly considers uncertainties associated with the evolution of technology and the level of future interest rates. The policies analyzed by the model specify both the timing and optimal capacity level of conversion to flexible automation. The objective of a firm, and the output of the model, is to determine an expected discounted cost minimizing strategy over a finite planning horizon that prescribes the optimal level of new technology to employ in each period as a function of the level of technology available, the mix of new and old technologies, and the level of interest rates. |
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