ECONOMIC JUSTIFICATION FOR INCREMENTAL IMPLEMENTATION OF ADVANCED MANUFACTURING SYSTEMS

The strategic decision to integrate Advanced Manufacturing Systems (AM S) within a traditional production system has become an attractive and sometimes necessary alternative in many industrial settings. The purp ose of this paper is to develop a model that focuses on this particula r decision-making problem. Simplifications and approximations introduc ed at the operational level permit two key issues to be addressed: (1) where should AMS be implemented; and (2) when should this implementat ion occur. The model is shown to have good structure for a simplified analysis, thus making it particularly useful in instances where only r ough estimates of costs are available and extensive 'what if' type ana lyses are therefore required.