Title: Economic analysis for agility in manufacturing environment

Authors: Laith A. Hadidi, Ibrahim A. Rawabdeh

Addresses: Systems Engineering Department, King Fahd University for Petroleum and Minerals, Dhahran 31261, Saudi Arabia. ' Industrial Engineering Department, University of Jordan, Amman, Jordan

Abstract: This article is intended to model unpredictable change in an agile manufacturing environment. A model for unpredictable changes expressed by an agility index was developed and explained through numerical simulation. The model took into consideration the need for investing in agility depends upon the business circumstances and environmental turbulence. It shows that investing in agility increases the expected savings from changes and decreases the expected time a company needs to spend in dealing with change intelligently. The mathematical model is developed to evaluate the expected total cost through the four dimensions of change: cost, time, scope and robustness. This model supports the decision making process for justifying agility investment using change sensors analysis, and it aids in finding the optimal value of an agility index that minimises the expected total cost. It is found that there is an optimal value for an agility index that minimises the expected total cost for a certain production system.

Keywords: agility index; change sensors; intelligent manufacturing systems; IMS; agile manufacturing; simulation; unpredictable changes; mathematical modelling; agility investment; investment justification; total cost minimisation.

DOI: 10.1504/IJCAT.2008.020959

International Journal of Computer Applications in Technology, 2008 Vol.32 No.3, pp.232 - 241

Published online: 26 Oct 2008 *

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