Investment strategies for flexible resources
Article Abstract:
A study examined optimal investment in flexible manufacturing resources. It focused on a firm challenged by uncertainty in demands for its two products which has the choice to invest in product-specific resources and in a flexible resource that can generate either product but has to decide before demand is ascertained. Through flexible resource, the firm can hedge against such uncertainty in demand although it can lead to a greater investment cost than the dedicated resources. This study gave evidence to the significant role of price and cost mix differentials, which not only affect the correlation between product demands but also the investment decision in flexible technology and the value of flexibility. Thus, investing in flexible resources even in the context of perfectively positively correlated product demands can be beneficial.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1998
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Evolutionary patterns of flexible automation and performance: a longitudinal study
Article Abstract:
The rate of investment for advanced manufacturing technologies (AMT) has considerably increased over the years, as companies underscore the significance of improving financial performance through technical innovations. Results gathered from an analysis of 112 manufacturing facilities involved in metal-working operations revealed that investments for robotics, electronic mail and computer aided design has substantially increased from 1994 to 1996. Among these technologies, electronic mail registered the most pronounced increase, buoyed the growing popularity of the Internet. The study also confirmed the correlation between technological investments and company performance. Firms that have invested heavily on AMTs manifested better performance compared to their counterparts.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1999
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