Impact of reconfiguration characteristics for capacity investment strategies in manufacturing systems

The increasing frequency of new product introductions force today's companies to continuously upgrade their production capacities. The frequent revision of production capacities and the capacity loss during the reconfiguration period increase the importance of ramp up duration in evaluating capacity investments. This paper aims to explore how a firm should optimally allocate its capacity investments among dedicated manufacturing systems (DMSs), flexible manufacturing systems (FMSs) and reconfigurable manufacturing systems (RMSs) considering the capacity evolution in ramp up period. The proposed model addresses a firm making multiple products for which demand is deterministic and has a specific life cycle. Furthermore, the duration of reconfiguration period is modeled as a function of the amount of capacity change.