Engineering economic model of optimal manufacturing technology selection in a framework of concurrent engineering: Theory and application to industrial electrification
Abstract
This study was undertaken to develop a model of how a firm can choose a manufacturing technology in such a way as to account for its ability to provide customers with characteristics that they desire. As a first step, the technology investment decision is linked to customer valuation through the firm's decision variables of production capacity and product specification. An optimization method is developed for situations holding one of those two decision variables constant and placed in the engineering economic literature. Next a method for the solution of the concurrent capacity specification decision problem is developed and related to the marketing and microeconomic literatures, followed by the development of a technology choice model which makes use of this general approach. The notion of technology dominance is developed to provide for some degree of consideration for the effect of revenue considerations on technology choice when little or no information is available about the market that the firm is facing. Finally, this model is applied to understanding the competitive position of electrical vs. fossil fuel powered manufacturing process technologies, with a detailed analysis of technology choice in the area of industrial paint curing.
Degree
Ph.D.
Advisors
Sparrow, Purdue University.
Subject Area
Industrial engineering|Business costs|Business community
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