INVESTMENT JUSTIFICATION OF ADVANCED MANUFACTURING TECHNOLOGY - AN EMPIRICAL-ANALYSIS

This study surveys the usage of various justification activities in plants that have adopted advanced manufacturing technology (AMT). Relationships between the usage of these activities and the level of performance of AMT projects are also determined. Our findings suggest that justification approaches and justification criteria preference help to explain the adoption of the more integrated technologies. However, the number of functional departments involved in AMT justification activities is more effective in explaining project performance than the other justification activities. Our results also indicate that the majority of plants are not utilizing discounted cash-flow and probabilistic techniques. This study provides some insights into the formation of decision making teams for the justification process. Future research directions in this area are also suggested.