ABSTRACT
This chapter discusses the present study of heuristic approaches for deriving investment plans and making technology choices and describing the tradeoffs between cost and manufacturing flexibility. It presents several investment models that make a contribution to the evaluation of flexible technologies in discrete manufacturing systems. The chapter demonstrates that manufacturing flexibility is economically justified under both deterministic and stochastic environments. It presents extensive computational experiments to derive manufacturing capacity strategies. Flexible technologies are particularly useful in stochastic environments that are characterized by uncertainty. The approximation approaches are easy-to-implement tools that can support management investment decisions in production capacity over medium- and long-term planning horizons. Although the case of uncertain demands has been examined by several researchers, stochastic and dynamic demand patterns in the case of multiple products and multiple periods has been studied by few researchers.
