Evaluating Flexible Manufacturing Systems

Many firms are considering Flexible Manufacturing Systems (FMS) as a means for increasing productivity, quality and profitability. In this paper a methodology for properly comparing and evaluating FMS's is presented, The appropriate financial criteria are presented. Mathematical models of different FMS's are presented. The important stochastic variables are determined. The principles of stochastic dominance, risk preference and the value of information; and a decision analysis cycle are used to evaluate the FMSY