John R. Canada

Past and Present Methods of Manufacturing Investment Evaluation: A Review of the Empirical and Theoretical Literature

Abstract Abstract As early as the 1950s, capital budgeting processes based on discounted cash flow served as the principal tools for evaluating capital investment proposals for American firms. Buffeted during the late 1970s and 1980s by overseas competition, American firms, supported by innovative researchers, reconsidered capital investment evaluation practices. This paper briefly discusses both past and present manufacturing investment evaluation methods.

Annotated Bibliography on Justification of Computer-Integrated Manufacturing Systems

ABSTRACT This is an extensive, but not exhaustive, bibliography for persons interested in the Justification (economic and/or non-economic) of the various aspects normally associated with computer-integrated manufacturing (CIM) systems. Moat works cited Include a brief annotated comment regarding subject inclusions and perhaps perceived strengths- For the 100 plus citations, fifty-two are categorized as being generally subjective overview/guidelines, and thirty-five are categorized as including quantitative techniques/analysis methodologies for Justification of CIM systems or components of such systems.

Persistent pitfalls and applicable approaches for justification of advanced manufacturing systems

Abstract This article focuses on main pitfalls/errors in application of traditional economic decision models which tend to impede the adoption of advanced manufacturing systems. The three main pitfalls are: arbitrarily high hurdle rates, comparison with the status quo, and insufficient benefits analysis. Several simple models are presented as approaches to overcoming those pitfalls so as to provide for more useful evaluations.

SOME PROBLEMS IN USING BENEFIT'COST RATIOS WITH THE ANALYTIC HIERARCHY PROCESS

ABSTRACT For Analytic Hierarchy Process applications having separate benefit and cost output vectors, Saaty has recommended choosing a solution using a simple benefit/cost ratio procedure. But, even when benefits and costs are known with certainty and measured in dollars, it is shown that this procedure does not, in general, yield an optimal solution. An incremental analysis, with further specification of an appropriate cutoff rate, is shown to be required. Saatys procedure is also shown to be sensitive to arbitrary semantic changes in benefit and cost labelling, while proper procedures, such as the one proposed herein, do not have that sensitivity.

A method for the incorporation of parametric uncertainty in the weighted evaluation multi-attribute decision analysis model

We develop an extension of the classic Weighted Evaluation (WE) Multi-Attribute Decision Analysis (MADA) model that allows for uncertainty in the parameters of the model. Uncertainties in attribute importance weights and alternative evaluation ratings are represented by independent uniform, triangular or beta random variables; and an iterative multi-variate integration scheme is used to evaluate the mean, variance and skewness of the resulting Probabilistic Weighted Evaluation (PWE). These moments are used to compute two-term Edgeworth and normal approximations to the distribution of: (a) the PWE for each of several alternatives that are to be analysed separately; or (b) the difference between PWEs for selected alternatives that are to be analysed on a pairwise basis. The proposed methodology is used to compare probabilistically three alternative solutions to the Mexico City Airport Siting Problem of Keeney and Raiffa (Keeney, R. L. and Raiffa, H., Decisions with Multiple Objectives. Wiley, New York, 1976).