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Abstract:
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Significant advances in manufacturing technology
require new methods to measure potential changes in
performance that more accurately reflects the value of
technology in yarn manufacturing. Typically, total
performance of an operation is measured by simple
productivity indicators, such as output per man-hour, or
cost per unit. The textile industry also uses labor or
other partial productivity measures rather than a
measurement including all affected factors. This study
considered three main components of manufacturing
performance: productivity, quality, and flexibility.
Productivity is commonly measured and evaluated: however,
quality and flexibility were harder to justify because of
difficulties in quantifying the economic value of these
factors.
The first step in the model's development was designing
cost equations that measured a plant's economic value of
productivity, quality, and flexibility. These equations
represent each factor associated with an operation. The
common determinant in each equation is the planning horizon
or time period under investigation. This allowed for the
total performance equation to consider all factors involved.
The second step of the model's development centers around the output value of an operation. The output value
is made up of the output pounds per planning horizon and the
price received per pound. It was found that output value is
influenced by customers' perception of the product's value.
Thus, a change in plant technology should ultimately affect
both customer perceived value and plant output value. The
model was designed to consider these relationships.
The resultant model from this research has been found
to be a useful tool in measuring a plant's economic value
for either the estimation of technoiogy changes or the
signalling of deficient economic value factors within the
operation. It was concluded that measuring an operation's
economic value using only partial factors can give
misleading results.
This model is designed to assist in the decision
process for considering new technology changes to an
existing yarn manufacturing plant. It was concluded that
using the economic value analysis model allows a facility's
management to more accurately gauge how a technology change
will affect the present economic value of the operation.
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