Method and procedure for economic evaluation of improvement activities

Hirokazu Kono, Osamu Ichikizaki

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

The purpose of this paper is to propose an appropriate evaluation scheme for improvement activities, based on a simple model comprising cash inflow by sales as well as variable and fixed cost expenditures. The paper distinguishes capacity surplus and capacity shortage situations, and examines economic benefits gained by yield increase improvement and capacity increase. The paper then proposes a basic rule of thumb for economic evaluation of improvement activities. The logic is simple but useful in practice, being conducive towards improvement activities under current economic conditions with uncertainties.

Original languageEnglish
Pages (from-to)122-128
Number of pages7
JournalIndustrial Engineering and Management Systems
Volume14
Issue number2
DOIs
Publication statusPublished - 2015 Jun 1

Keywords

  • Capacity
  • Demand
  • Economic Evaluation
  • Improvement Activities
  • Yield

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)
  • Social Sciences(all)

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