Date of Award

Fall 1970

Document Type

Thesis - Restricted

Degree Name

Master of Science (MS)


Mechanical and Industrial Engineering

First Advisor

Richardson, B. L.

Second Advisor

Hirthe, Walter


A numerically controlled machine-tool is recognized as a complete machining center and its acquisition is very much desired by companies, big and small. However, the smaller companies find it difficult to justify the large capital investment necessary. Justification based on direct cost savings alone is not complete. The overall effects of N/C on the company as a whole are more important and they include such intangible benefits as increase in competitive power and reduction in lead time and backlog. The objective of this study is, therefore, to evaluate the desirability to invest in N/C machines for a small job-shop by measuring the overall effects on the company due to the tangible as well as intangible benefits. The approach used here is Jay W. Forrester's "Industrial Dynamics". The philosophy of industrial dynamics and of management science is studied in Chapter II of this thesis. The methodology used is to construct an industrial dynamics simulation model to represent the overall operations of a company operating as a job-shop with conventional machine-tools. An evaluation is made by comparing the "before and after" effects of N/C acquisition, by computer runs. The important factors built into the model are the interactions between customer order rate, delivery delay, backlog and the production rate including overtime. A financial sector is also included which measures the overall effects and gives the rate of profit before and after N/C.



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