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Capital budgeting and flexible manufacturing

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  • Álvarez, María José

Abstract

The lack of measurement and evaluation of flexible manufacturing possibilities seriously handicaps the appraisal and justification of investments in flexible technologies. It is the goal of this paper to formulate a comprehensive definition of manufacturing flexibility which can be explicitly translated into economic and financial variables. Further translation is based upon the financial instruments of cash budgeting and capital budgeting. The sensitivity of the economic and financial variables to shifts in manufacturing/operational flexibility will be discussed from a theoretical point of view. It is concluded that operative variables for flexible technologies can become indicators of economic and financial aspects.

Suggested Citation

  • Álvarez, María José, 1993. "Capital budgeting and flexible manufacturing," DEE - Working Papers. Business Economics. WB 7080, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    • Handle: RePEc:cte:wbrepe:7080
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    References listed on IDEAS

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    1. Robb Dixon, J., 1992. "Measuring manufacturing flexibility: An empirical investigation," European Journal of Operational Research, Elsevier, vol. 60(2), pages 131-143, July.
    2. Gupta, Yash P. & Somers, Toni M., 1992. "The measurement of manufacturing flexibility," European Journal of Operational Research, Elsevier, vol. 60(2), pages 166-182, July.
    3. Bernardo, John J. & Mohamed, Zubair, 1992. "The measurement and use of operational flexibility in the loading of Flexible Manufacturing Systems," European Journal of Operational Research, Elsevier, vol. 60(2), pages 144-155, July.
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