A Decision-Analytic Feasibility Study of Upgrading Machinery at a Tools Workshop

  • M. L. Chew Hernandez Department of Grad. Studies and Research, Technological Institute of High Studies of Coacalco, Mexico
  • E. K. Velazquez Hernandez Department of Industrial Engineering, Technological Institute of High Studies of Chalco, Mexico
  • S. Leon Dominguez Department of Industrial Engineering, Technological Institute of High Studies of Chalco, Mexico
Keywords: decision analysis, equipment replacement, integral decision analysis, utility


This paper presents the evaluation, from a Decision Analysis point of view, of the feasibility of upgrading machinery at an existing metal-forming workshop. The Integral Decision Analysis (IDA) methodology is applied to clarify the decision and develop a decision model. One of the key advantages of the IDA is its careful selection of the problem frame, allowing a correct problem definition. While following most of the original IDA methodology, an addition to this methodology is proposed in this work, that of using the strategic Means-Ends Objective Network as a backbone for the development of the decision model. The constructed decision model uses influence diagrams to include factual operator and vendor expertise, simulation to evaluate the alternatives and a utility function to take into account the risk attitude of the decision maker. Three alternatives are considered: Base (no modification), CNC (installing an automatic lathe) and CF (installation of an automatic milling machine). The results are presented as a graph showing zones in which a particular alternative should be selected. The results show the potential of IDA to tackle technical decisions that are otherwise approached without the due care.


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