Evaluation of Investment in Modern Manufacturing Equipment Using Discrete Event Simulation

Decisions to invest in manufacturing systems represent a strategic decision making process affecting long-term success, competitiveness and profitability of a company. The paper deals with a comprehensive analysis of the benefits generated by actual investment in modern manufacturing equipment covering all relevant effects related to the investment, including cost savings, reduced production lead times, decreased level of work in progress, balanced equipment capacity utilization, and improved product quality. Comparison of the existing method of manufacturing with the newly proposed investment in flexible manufacturing equipment is designed for a defined product mix, product demand and product flow using dynamic discrete simulation. A simulation model is primarily used to estimate the operating characteristics, such as idle time, capacity utilization, lead times and productivity. The evaluation of operating parameters of the new manufacturing equipment is subsequently completed by the assessment of its financial impacts. (C) 2015 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license