ABSTRACT
This chapter reviews analytically the literature concerning evaluating investment decisions in Advanced Manufacturing Systems (AMS). The main problem in applying discounted cash how methods for evaluating the decision to acquire AMS is the failure of these models to quantify the benefits of the acquisition of automation. The payback period method has been criticised for its use in evaluation of investments in general and particularly investments in AMS. Insufficient benefit analysis is due to the difficulty of quantifying the qualitative benefits of AMS investments in cash flows terms. Although, the qualitative approach concentrates on the qualitative variables which represent the biggest problem facing the evaluation techniques of investment in AMS, almost all the methods included in this approach are extremely judgmental in nature. The ability of analytich hierarchy process to structure a complex problem hierarchically and synthesise priorities to the decision alternatives, has attracted many researchers to apply it in the area of evaluating AMS investments.
