Plant Layout under Discounted Sequential Machinery Investment using Dynamic Programming Approach
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Date
2015-09
Journal Title
Journal ISSN
Volume Title
Publisher
IOSR Journal of Mechanical and Civil Engineering
Abstract
Dynamic programming is employed in this study to develop a model that helps entrepreneurs to
populate pre-planned plant layout using discounted sequential machinery investment method. The approach
enables the use of little initial capital to sequentially invest in the most important machinery/machineries and
factory and office space(s) as well as to provide sufficient working capital required by the industry to keep the
plant working optimally per period. In addition, it takes into consideration the time value of money that may
arise from inflation on the economy during the sequential investment period using discounting method. Using
the developed model and a set of decision rules that was setup, total earnings obtained from previous periods
are subsequently re-invested each period, while ensuring adequate working capital, until all the planned
machines and factory and office buildings have been fully put in place. The model developed was implemented
through a software named DYNAPLANT2015 which was developed using C# programming language to
facilitate the solution procedure. An appropriate case study was used to evaluate the model and observe
possible difference between the undiscounted and discounted sequential machinery investment
Description
Keywords
Plant layout, Discounting, sequential machinery investment, Dynamic programming, Entrepreneur