TY - GEN
T1 - A Real Options Approach for NPV Investment Evaluation of Changeable Manufacturing Systems
AU - Olsson, Fredrik
AU - Werthén, Alexander
AU - Andersen, Ann-Louise
PY - 2022
Y1 - 2022
N2 - Dealing with uncertain market conditions is a growing challenge for manufacturers. Changeable manufacturing systems have been suggested as a means to overcome the challenges resulting from uncertain markets. However, for changeability to acquire wide acknowledgement and implementation within industry, a clear economic justification considering the higher initial investment of such a system is needed. This paper attempts to develop an investment model comprehending the benefits of changeability, while focusing on applicability in industry. The proposed model complements a traditional Net Present Value method by evaluating the added value for changeability at either system or machine level, using a combination of Real Options approach. The model is applied in an industrial case and demonstrates an added value for changeability in both a flexible and reconfigurable manufacturing system.
AB - Dealing with uncertain market conditions is a growing challenge for manufacturers. Changeable manufacturing systems have been suggested as a means to overcome the challenges resulting from uncertain markets. However, for changeability to acquire wide acknowledgement and implementation within industry, a clear economic justification considering the higher initial investment of such a system is needed. This paper attempts to develop an investment model comprehending the benefits of changeability, while focusing on applicability in industry. The proposed model complements a traditional Net Present Value method by evaluating the added value for changeability at either system or machine level, using a combination of Real Options approach. The model is applied in an industrial case and demonstrates an added value for changeability in both a flexible and reconfigurable manufacturing system.
KW - Changeability
KW - Changeable manufacturing
KW - Investment model
KW - Real options approach
KW - Reconfigurable manufacturing system
UR - http://www.scopus.com/inward/record.url?scp=85119434806&partnerID=8YFLogxK
U2 - 10.1007/978-3-030-90700-6_14
DO - 10.1007/978-3-030-90700-6_14
M3 - Article in proceeding
SN - 9783030906993
T3 - Lecture Notes in Mechanical Engineering
SP - 130
EP - 137
BT - Towards Sustainable Customization
A2 - Andersen, Ann-Louise
A2 - Andersen, Rasmus
A2 - Brunoe, Thomas Ditlev
A2 - Larsen, Maria Stoettrup Schioenning
A2 - Nielsen, Kjeld
A2 - Napoleone, Alessia
A2 - Kjeldgaard, Stefan
PB - Springer
T2 - 8th Changeable, Agile, Reconfigurable and Virtual Production Conference, CARV 2021 and 10th World Mass Customization and Personalization Conference, MCPC 2021
Y2 - 1 November 2021 through 2 November 2021
ER -