Abstract
Flexible manufacturing systems (FMSs) can apply the efficiencies of large-scale production to small batch production. The coordination of FMS activities is a complex task; this paper presents a decentralized pricing mechanism that can be used to estimate the activity-based costs and manage the activities of the FMS efficiently. The pricing mechanism described in this paper does not require systemwide information to compute prices; instead, the pricing mechanism samples and uses the demand information at each CNC machine to compute rental prices at that machine. We derive the theoretical formula for rental prices supporting the optimal performance and propose simulation studies to estimate the rental prices for real-time price changes in a decentralized manner. Results from a preliminary simulation study indicate that stable rental prices can be estimated and significant improvements can be realized by using the pricing mechanism.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 167-193 |
| Number of pages | 27 |
| Journal | International Journal of Flexible Manufacturing Systems |
| Volume | 9 |
| Issue number | 2 |
| DOIs | |
| State | Published - 1997 |
Bibliographical note
Funding Information:This research was funded in part by National Science Foundation #IRI-9005969 but does not necessarily reflect the views of the NSF. Partial funding was also provided by Hewlett Packard Corporation and Texas Advanced Research Program. The authors thank two anonymous referees for their helpful suggestions and comments on the earlier version of this paper.
Keywords
- Benefits
- Decentralization
- Flexible manufacturing systems
- Pricing
- Simulation
- Stochastic equilibrium
