Analyzing Trade-Offs Between Machine Investment And Utiliza

Examining machine investment opportunities from a systems perspective requires an understanding of interdependencies between machine investment and utilization decisions. Machine investment decisions involve establishing the number of machines to purchase and their types. Machine utilization decisio...

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Bibliographic Details
Published inManagement science Vol. 35; no. 10; p. 1215
Main Authors Vander Veen, David J, Jordan, William C
Format Journal Article
LanguageEnglish
Published Linthicum Institute for Operations Research and the Management Sciences 01.10.1989
Subjects
Capital goods
Cost benefit analysis
Investment
Machines
Utilization review
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Summary:Examining machine investment opportunities from a systems perspective requires an understanding of interdependencies between machine investment and utilization decisions. Machine investment decisions involve establishing the number of machines to purchase and their types. Machine utilization decisions involve determination of part allocations and production cycles. Interdependencies between these decisions result in trade-offs between investment and operating costs. An analytical approach for studying machine investment opportunities in a broad systems context is developed. The interdependencies between investment and utilization decisions are discussed, and the existing machine investment literature is reviewed. A mathematical model is formulated that quantifies investment-utilization interdependencies. A simple example is presented that demonstrates the usefulness of the model and that highlights the importance of using a systems approach.
ISSN:0025-1909
1526-5501