Flexible assembly systems have emerged as a key manufacturing strategy in many industries, such as automotive, electronic components and computers, to respond to stronger market competition and greater product proliferation. As more companies install flexible assembly systems, design and planning decisions for such flexible systems have to be considered together with other factors besides market demand and competitive forces. This paper presents a cost analysis tool that estimates the cost of flexible assembly lines. Specifically, it provides the capability to study the production of a given set of products while evaluating the impact of different flexibility strategies on total assembly cost. A mathematical description of the model is given, followed by a case study demonstrating its application to strategic decisions during the early planning stages of assembly system design.

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