A multi-criterion decision model for advanced manufacturing technology acquisition in supply chain networks

Supply chains are the key to successful business performance in manufacturing and service organizations. One of the biggest challenges faced by these organizations in the chain is the need to respond to frequent and unpredictable changes in the market. Acquisition of advanced manufacturing technology (AMT) in the manufacturing plants constituting the supply chain network can be used as a strategy to respond to these changes. We propose a mixed integer programming model (MIP) that can determine the appropriate combination of various components and levels of AMT by minimizing the total technology acquisition costs under conflicting technical, managerial and financial objectives in order to meet the demand in the respective time periods. The model can aid the manufacturing plants/supply chain driver in various ways: (1). by generating and comparing various AMT alternatives for the manufacturing plant, (2). to assess the overall impact of change in performance level of one component of technology, and (3). run sensitivity analysis on technology capacity requirements, performance levels of various components and levels of AMT and various associated costs.