Conceptual Model for Evaluating Setup Reduction Using a Real Options Approach
Obtaining sustainable competitive advantages in an environment of volatile customer demand requires the ability to adapt manufacturing processes in a way that would allow a firm to harness market opportunities. Flexibility within a manufacturing system is a key contributor to the satisfaction of custom requirements including shorter lead-times, high-quality, customization and low cost. The purpose of this paper is to conceptualize the application of a financial options approach to value the flexibility associated with investments in setup reduction. The approach views setup reduction as a process in which the manufacturing system is subjected to production efficiency improvement by reducing or eliminating non-value-adding activity with the objective of increasing production capacity and flexibility. Thus, setup reduction aids in achieving the goals of lean manufacturing: eliminate waste and produce high-quality products with the lowest cost and shortest cycle time. Furthermore, we propose that a real options approach is well suited to the evaluation of setup reduction.
Manufacturing Setup reduction Flexibility Real options Lean manufacturing
Fola Michael AYOKANMBI Sherri MESSIMER Phillip A.FARRINGTON
Department of Technology Alabama A&M University,Normal,Alabama 35762,USA Department of Industrial and System Engineering and Engineering Management The University of Alabama
国际会议
北京
英文
2007-05-30（万方平台首次上网日期，不代表论文的发表时间）