An optimal acquisition policy for advanced manufacturing technology under probabilistic evolution of the technological process

College

Gokongwei College of Engineering

Department/Unit

Industrial Engineering

Document Type

Article

Source Title

DLSU Engineering Journal

Volume

14

Issue

2

First Page

58

Last Page

69

Publication Date

3-2001

Abstract

This paper intends to provide a mathematical model which incorporates the two major concerns in advanced manufacturing technology (AMT) acquisition: the multi-attribute structure of the decision-making process and the timing of the acquisition given the probabilistic evolution of the technological process. Using net present value, flexibility, and quality as the main objectives of the company for acquiring AMT, the model solves for the optimal acquisition policy to be followed by the firm for a given planning horizon using finite-stage dynamic programming.

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Disciplines

Industrial Technology

Keywords

Industrial engineering—Mathematics; Statistical decision; Technological innovations

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