Justification of manufacturing technologies using fuzzy benefit/cost ratio analysis

The application of discounted cash flow techniques for justifying manufacturing technologies is studied in many papers. State-price net present value and stochastic net present value are two examples of these applications. These applications are based on the data under certainty or risk. When we have vague data such as interest rate and cash flow to apply discounted cash flow techniques, the fuzzy set theory can be used to handle this vagueness. The fuzzy set theory has the capability of representing vague data and allows mathematical operators and programming to apply to the fuzzy domain. The theory is primarily concerned with quantifying the vagueness in human thoughts and perceptions. In this paper, assuming that we have vague data, the fuzzy benefit-cost (BIC) ratio method is used to justify manufacturing technologies. After calculating the BIC ratio based on fuzzy equivalent uniform annual value, we compare two assembly manufacturing systems having different life cycles. (C) 2000 Elsevier Science B.V. All rights reserved.