A role for computer simulation in the economic analysis of manufacturing systems

This paper discusses traditional economic analysis methodologies used in evaluating manufacturing systems and points out some potential problems with these methodologies because of the omission of certain cost elements in the analysis and/or not having an appropriate mechanism for accurately estimating certain additional cost elements and product revenues. Integrating computer simulation into the economic analysis methodologies is proposed as a way of eliminating the shortcomings preceived in them. The paper further discusses how computer simulation models can be used to develop product revenues and certain system cost components that are either not included or not estimated accurately in the current approaches.