The use of simulation in activity-based costing for flexible manufacturing systems

A framework to design simulation models is described in order to perform activity-based costing for flexible manufacturing systems before actual manufacturing activities. For illustrating a procedure to perform activity-based costing, analysis of the random-access type of the flexible manufacturing system (FMS) is performed from both efficient and economic standpoints, by simulating. The flexible manufacturing system considered in this paper consists of NC machine tools (i.e., one NC lathe, one turning center, and two machining centers), one washing machine, the AS/RS, and AGVs. Workparts are machined at the assigned NC machine tool(s) in the predetermined order of operations, and then transferred by AGVs. Set-up operations are performed by the industrial robot located inside the AS/RS. In this study, a simulation model for a FMS is constructed. Then a procedure for cost accounting is developed for obtaining the unit cost of the products through simulation experiment. It is shown that precise cost accounting can be performed before actual manufacturing activities, if kinds of designated products and their production quantities are specified.