Industrial Flexibility in Theory and Practice

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dc.contributor.advisorFu, Michaelen_US
dc.contributor.advisorGoyal, Manuen_US
dc.contributor.authorReindorp, Matthewen_US
dc.contributor.departmentBusiness and Management: Decision & Information Technologiesen_US
dc.contributor.publisherDigital Repository at the University of Marylanden_US
dc.contributor.publisherUniversity of Maryland (College Park, Md.)en_US
dc.date.accessioned2009-10-06T06:01:45Z
dc.date.available2009-10-06T06:01:45Z
dc.date.issued2009en_US
dc.description.abstractAt the heart of any decision problem is some degree of "flexibility" in how to act. Most often, we aim to extract greatest possible value from this inherent flexibility. The three essays compiled here are aligned with this same general aim, but we have an important secondary concern: to highlight the value of flexibility itself in the various situations we study. In the first essay, we consider the timing of an action: when to replace obsolete subsystems within an extensive, complex infrastructure. Such replacement action, known as capital renewal, must balance uncertainty about future profitability against uncertainty about future renewal costs. Treating renewal investments as real options, we derive the unique, closed-form optimal solution to the infinite horizon version of this problem and determine the total present value of an institution's capital renewal options. We investigate the sensitivity of the solution to variations in key problem parameters. The second essay addresses the promising of lead times in a make-to-order environment, complicated by the need to serve multiple customer classes with differing priority levels. We tackle this problem with a "model free" approach: after preparing a discrete-event simulation of a make-to-order production system, we determine a policy for lead time promising through application of a reinforcement learning algorithm. The third essay presents an empirical analysis of new product launches in the automotive industry, showing that manufacturing flexibility is one key indicator of superior productivity during launch. We explore the financial dimensions of the apparent productivity differences and show that the use of flexible manufacturing increases an automobile plant's likelihood of being chosen to host a new product launch.en_US
dc.format.extent1067243 bytes
dc.format.mimetypeapplication/pdf
dc.identifier.urihttp://hdl.handle.net/1903/9537
dc.language.isoen_US
dc.subject.pqcontrolledEngineering, Industrialen_US
dc.subject.pqcontrolledOperations Researchen_US
dc.subject.pquncontrolledadvanced available-to-promiseen_US
dc.subject.pquncontrolledflexibilityen_US
dc.subject.pquncontrolledproduct launchen_US
dc.subject.pquncontrolledreal optionsen_US
dc.subject.pquncontrolledreinforcement learningen_US
dc.subject.pquncontrolledreinvestment timingen_US
dc.titleIndustrial Flexibility in Theory and Practiceen_US
dc.typeDissertationen_US

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