Simultaneous cost and production analysis of manufacturing systems

An opportunity for the participation of simulation modelers in the strategic planning of the firm is the development of integrated models for the evaluation of complex business scenarios. These models can be used to make the problem of investment in manufacturing technology more transparent to decision makers. The assumptions that a firm uses regarding the allocation of direct and indirect costs can be explored prior to the development of policies. The interaction of multiple products and production technologies can be evaluated. The research and professional literature pertaining to each of these issues are reviewed. An experimental model is presented and described in detail, using the capabilities of a modern discrete-event simulation language. Date collected from multiple runs of this sample scenario are manipulated using spreadsheet procedures to produce a plot of cash flow for a sample set of assumptions. The applicability of this approach to a broader set of scenarios is discussed