Strategic FMS design under uncertainty: A fuzzy set theory based model

Abstract Flexibility is assuming more and more relevance in the manufacturing strategy, because it allows to face the increasing uncertainty in which the firms are competing nowadays. In order to increase their strategic competitiveness, several firms in many industries are increasing their investment in Flexible Manufacturing Systems (FMS). In the first FMS design step the following decisions should be made: (a) flexibility level decision, i.e. how many kind of products the designing FMS has to produce; (b) size level decision, i.e. what is the aggregate volume the FMS can perform; (c) capacity definition decision, i.e. how many machines for each type have to be installed. These decisions are to be made under an uncertain design environment. The major uncertainty concerns the demand and the price for each product due to the market forecasts uncertainty, and the work-load characteristics (time and routing) of each product due to the product changes over the manufacturing system life cycle. The design objectives are the expected profit maximization and the investment risk minimization, trying to increase the flexibility level and to reduce the profits uncertainty. This paper proposes a fuzzy set theory multiple objectives model that is able to face the uncertainty in the design data determining the FMS configuration that optimizes the expected profits considering the entrepreneur risk propensity.