Economic Justification of Flexible Manufacturing Systems Using the Leontief Input-Output Model

Abstract

The Leontief Input-output model and linear programming are used to determine performance measures of a flexible manufacturing system for the economic Justification of the system. The performance measures Include: the total number of units processed within a specified time interval at each machining center: the number of acceptable components produced within a given time interval: and the average number of transfers between machining centers for each component. The first two performance measures are used to estimate the productivity of the system and the costs associated with scrap. The third performance measure is used to estimate material handling time and costs. These performance measures are then used as inputs to the Analytic Hierarchy Process for the economic Justification of the flexible manufacturing system. An example of a Job shop system and two alternative flexible manufacturing systems is given to illustrate the methodology.