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Manufacturing strategy analysis: Models and practice

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  • Billington, CA
  • Davis, TC

Abstract

In this paper we examine the relationship between manufacturing strategy and cost modeling. Combining activity-based accounting and mathematical programming concepts, we define a structure and specific production cost functions for use in quantitative facility strategy models. The cost functions explicitly consider economies of scale and diseconomies of scope. We incorporate these cost functions into optimal facility network design formulations, and we use the resulting models as a basis for assigning individual facility charters and supply chain network structures. This modeling process has been used extensively at Hewlett-Packard Company. A case study is included.

Suggested Citation

  • Billington, CA & Davis, TC, 1992. "Manufacturing strategy analysis: Models and practice," Omega, Elsevier, vol. 20(5-6), pages 587-595.
    • Handle: RePEc:eee:jomega:v:20:y:1992:i:5-6:p:587-595
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    Cited by:

    1. Abdullah Dasci & Vedat Verter, 2005. "Evaluation of Plant Focus Strategies: A Continuous Approximation Framework," Annals of Operations Research, Springer, vol. 136(1), pages 303-327, April.
    2. Jason Amaral & Dorothea Kuettner, 2008. "Analyzing Supply Chains at HP Using Spreadsheet Models," Interfaces, INFORMS, vol. 38(4), pages 228-240, August.
    3. Chenhall, Robert H., 2005. "Integrative strategic performance measurement systems, strategic alignment of manufacturing, learning and strategic outcomes: an exploratory study," Accounting, Organizations and Society, Elsevier, vol. 30(5), pages 395-422, July.

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