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Optimal Investment of Capacity and Production Planning of Flexible Manufacturing Technology Considering Economies of Scope  

Lee, Deok-Joo (College of Mechanical and Industrial Systems Engineering, Kyung Hee University)
Publication Information
Journal of Korean Institute of Industrial Engineers / v.31, no.2, 2005 , pp. 135-142 More about this Journal
Abstract
This study addresses the problem of flexible technology acquisition in a multi-product market when demands are uncertain. We confine the concept of flexibility to the ability of manufacturing system to produce a number of different types of products, called a product-mix flexibility type. And an analytical model in which the economies of scope are incorporated explicitly as a feature of flexible technology is presented to find the optimal investment decision to acquire flexible technology and optimal production planning. The characteristics of optimal investment strategy related to capacity and production planning are discussed.
Keywords
flexible manufacturing technology; investment; economies of scope;
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