Production and Operations Analysis, Seventh Edition
Production and Operations Analysis, Seventh Edition
7th Edition
ISBN: 9781478623069
Author: Steven Nahmias, Tava Lennon Olsen
Publisher: Waveland Press, Inc.
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Chapter 11.7, Problem 22P
Summary Introduction

Interpretation: Reasons for which a traditional Net present value (NPV) analysis is notconsidered as an appropriate method of evaluating the desirability of purchasing an FMS.

Concept Introduction:

Net present value refers to the present value of the cash inflow and the present value of cash outflow during a particular period of time. Aflexible manufacturing system (FMS) refers to the production technique that is designed to easily adapt to the changes in the quality and quantity of goodsthat occurred during the manufacturing process.

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