Focused factories: a Bayesian framework for estimating non-product related investment

Gang Wang, Ratna Babu Chinnam, Ibrahim Dogan, Yan Jia, Melvin Houston and James Ockers

International Journal of Production Research, 2015, vol. 53, issue 13, 3917-3933

Abstract: Focused factories are one of the new manufacturing trends for automotive suppliers. A key requirement for these suppliers is the ability to accurately estimate both product and non-product related investment in these facilities to quote profitable business. We propose a systematic Bayesian framework to estimate non-product related investment in focused factories. Our approach incorporates uncertainty in the activity-based costing method and applies Monte Carlo simulation process to generate distributions of investment for the cost centres, and for the different project phases in setting up a facility. A Bayesian-updating procedure is introduced to improve parameter estimations as new information becomes available with experience in setting up these facilities. Our approach is deployed at a leading global automotive tier-one supplier, Visteon Corporation. The efficacy of the Visteon-focused factory cost model is validated using subject matter experts as well as by comparing the model results with estimates from the typical current process.

Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/00207543.2014.975373 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:tprsxx:v:53:y:2015:i:13:p:3917-3933

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TPRS20

DOI: 10.1080/00207543.2014.975373

Access Statistics for this article

International Journal of Production Research is currently edited by Professor A. Dolgui

More articles in International Journal of Production Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().