It is shown that conventional financial methodologies embody assumptions which are invalid when applied to major projects such as FMS. After critically discussing the assumptions normally made during financial evaluations, the technical problems associated with designing a computer program for FMS evaluation are described and it is shown that by devising a suitable conceptual model, these limitations can be overcome. The paper concludes by demonstrating how, by use of the model developed, together with the correct data input format for the interactive program, the problems normally considered inherent with conventional financial evaluation techniques can be readily overcome.
Get full access to this article
View all access options for this article.
References
1.
PrimroseP. L.LeonardR.The development and application of a computer based appraisal technique for the structured evaluation of machine tool purchaseProc. Instn Mech. Engrs, Part B, 1984, 198, No. 10,141–146.
2.
PrimroseP. L.LeonardR.Optimizing the financial advantage of using CNC machine tools by use of an integrated suite of programsProc. Instn Mech. Engrs, Part B, 1984, 198, No. 10,147–151.
3.
ParkinsonS. J.AvlonitisG. J.Management attitudes to flexible manufacturing systems. Proc. 1st Int. Conf. on FMS, 1982, pp 405–412 (IFS Publications Ltd.).
4.
PrimroseP. L.LeonardR.The use of discounted cash flow to evaluate the ‘intangible’ benefits of FMSProc. Instn Mech. Engrs, Part B, 1985, 199. this issue.
5.
SackettP. J.RathmillK.Manufacturing plant for 1985- developments and justificationProc. Instn Mech. Engrs, Sept. 1982, 196, 265–280.
6.
DarnellH.DaleM. W.Total project management, 1982 (British Institute of Management).
7.
PrimroseP. L.LeonardR.The financial evaluation of flexible manufacturing modules (FMM). International Machine Tool Conference, June 1984.
