A system simulation method for economic raw material selection is pres
ented, based on a realistic example. The total cost considered in raw
materials selection is deemed to include the basic raw material cost,
the extra manufacturing cost due to the selection of the particular ra
w material, and the final product quality cost. These costs are system
atically simulated for three typical areas of interest: for the purcha
sing operation, for the manufacturing process and for the final produc
t quality acceptance by the customer.