Manufacturing and Production Economics Numerical Model Old Non-FMS versus Modern FMS Plants
2019
Flexible
Manufacturing System (FMS) is a modern innovation in manufacturing technology
that allows a factory to switch at no cost between manufacturing different
products. This paper presents a simple numerical model of manufacturing and
production economics with illustrated demand and cost curves. The model shows
industry long-run equilibrium (E(Π)=0) for manufacturing and
production to supply hypothetical demand schedules for two products: 1 and 2.
The model has two plant types: old non-FMS Plant2L that can produce only product 2 and modern FMS PlantK that can switch easily
between manufacturing products 1 and 2. The model assumes linear total cost
curves with absolute capacity limits for the two plant types.
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