Sensitivity Analysis for Macroeconomic and Microeconomic Models of New Manufacturing Processes

Summary In manufacturing technology macroeconomic and microeconomic models are used; the former dealing with the aggregate time and cost of an entire process and the latter relating to individual cuts within the process. When a new process is considered in view of improved economics, the sensitivity analysis for both types of models is introduced in parametric form so as to investigate the effect of change in the parameters (multipliers) of cost rate, consumable costs, setup, tool change, etc. on the economic feasibility of a new process. This is accomplished by applying the necessary and sufficiency conditions of economic feasibility to either model. The sensitivity analysis yields the necessary and sufficient degree of improvement in processing time or material removal rate a new process must demonstrate so as to justify the additional investment required. Moreover, the ranges of the input parameters defining the acceptable performance envelope can be delineated. The application of the analysis to Laser Assisted Machining is briefly illustrated.